Lok Sabha Question No. 4377 (UNSTARRED), answered on 2026-03-19
Subject: Benefits of US Tariffs to MSMEs
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Smt. Bharti Pardhi, Dr. Shrikant Eknath Shinde, Shri Ravindra Dattaram Waikar, Shri Vishaldada Prakashbapu Patil, Shri Shrirang Appa Chandu Barne, Shri Naresh Ganpat Mhaske

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 4377 TO BE ANSWERED ON: 19.03.2026

## BENEFITS OF US TARIFFS TO MSMEs

SHRI NARESH GANPAT MHASKE: SHRI VISHALDADA PRAKASHBAPU PATIL: SHRI RAVINDRA DATTARAM WAIKAR: SHRI SHRIRANG APPA CHANDU BARNE:

4377. SMT. BHARTI PARDHI: DR. SHRIKANT EKNATH SHINDE:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) the key provisions of the interim trade pact between India and the United States of America and the  manner  in  which  it  is  expected  to  support  Micro,  Small  and  Medium  Enterprises  (MSMEs)  in integrating with and entering global value chains;
- (b) the details of mechanisms  through  which  trade  facilitation,  tariff  concessions,  standards harmonisation and market access support would be extended to MSME exporters under this pact;
- (c) the details of steps taken by the Government to assist MSMEs in meeting US regulatory, quality and compliance requirements to benefit from expanded trade opportunities;
- (d) the coordination with export promotion councils, industry associations and certification bodies to ensure MSME participation in overseas tenders and supply networks; and
- (e) whether  any  impact  assessment  has  been  undertaken  or  commissioned  to  estimate  potential export growth, job creation and competitiveness gains for MSMEs as a result of this interim trade pact and if so, the details thereof; if not, the reasons for the same?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SUSHRI SHOBHA KARANDLAJE)

(a) to (e): India and the United States (U.S.) announced a framework for trade deal on 2nd February 2026.  A  Joint  Statement  for  the  same  was  released  on  7th  February  2026.  The  agreement  delivers comprehensive tariff rationalisation, zero-duty access across large product categories, enhanced digital and technology cooperation, and a carefully calibrated framework to safeguard India's farmers, MSMEs and  domestic  industry.  Additional  ad  valorem  tariffs  of  25%  imposed  by  the  U.S.  on  certain  India's exports  were  removed  on  7 th February  2026.   Pursuant  to US  Supreme  Court  judgment  dated  20 th February  2026  invalidating  reciprocal  tariffs,  the  reciprocal  tariffs  are  no  longer  in  force.  The  US Government  has  issued  Executive  Orders  imposing  10%  tariffs  on  all  countries.  The  Government is studying  all  the  developments  thereafter  for  their  implications  and  remains  engaged  with  the  US Government.

Subject to the conclusion of the  Interim Agreement, the U.S. will provide preferential market access to Indian goods, including textile and apparel, leather and footwear, plastic and rubber, organic chemicals, home décor, artisanal products, certain machinery, etc. The agreement is expected to boost MSME  exports  in  marine  products,  processed  food,  textiles,  leather,  and  handicrafts  by  improving market  access  and  competitiveness,  while  protecting  sensitive  sectors. The  interests  of  all  sensitive sectors-dairy, agriculture, farmers,  and domestic industry-have been protected. Further information regarding the interim trade deal is also available at the following web link: https://www.commerce.gov.in/wp-content/uploads/2026/03/FTAs-achievement.pdf .

The Government has undertaken the following initiatives to support Micro, Small and Medium Enterprises (MSMEs) to increase their share in exports and boost their competitiveness in global value chain:

- I. Export  Promotion  Mission  (EPM):  -  The  Mission  will  provide  a  comprehensive,  flexible,  and digitally  driven framework for export promotion, with a total outlay of Rs.25,060 crore for FY 2025-26 to FY 2030-31. EPM marks a strategic shift from multiple fragmented schemes to  a single,  outcome-  based,  and  adaptive  mechanism  that  can  respond  swiftly  to  global  trade challenges and evolving exporter needs.

The Mission will operate through two integrated sub-schemes:

- i. NIRYAT  PROTSAHAN  -  focuses  on  improving  access  to  affordable  trade  finance  for MSMEs  through  a  range  of  instruments  such  as  interest  subvention,  export  factoring, collateral guarantees, credit cards for e-commerce exporters, and credit enhancement support for diversification into new markets.
- ii. NIRYAT  DISHA  -  focuses  on  non-financial  enablers  that  enhance  market  readiness  and competitiveness, including export quality and compliance support, assistance for international branding, packaging, and participation in trade fairs, export warehousing and logistics, inland transport reimbursements, and trade intelligence and capacity-building initiatives.

The Mission is designed to address structural challenges that constrain Indian exports, including limited  and  expensive  trade  finance  access,  high  cost  of  compliance  with  international  export standards, inadequate export branding and fragmented market access, and logistical disadvantages for exporters in interior and low-export- intensity regions.

- II. In  addition,  Credit  Guarantee  Scheme  for  Exporters  has  also  been  approved  to  provide  100% credit guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs) for extending additional collateral free credit facilities up to Rs.20,000 crore to eligible exporters, including MSMEs. The Scheme is expected to enhance the  global  competitiveness  of  Indian  exporters  and  support  diversification  into  new  and emerging  markets.  Enabling  collateral-free  credit  access  will  strengthen  liquidity  and  ensure smooth business operations.

- III. International Cooperation Scheme: The scheme aims to build capacity of MSMEs by facilitating their participation in international exhibitions/fairs/conferences/seminar/buyer-seller meets abroad as well as reimbursement of various costs involved in exports.
- IV. Comprehensive GST rationalisation recently done by the government will strengthen MSMEs fortifying  local  supply  chains  in  critical  sectors  like  automobiles,  textiles,  food  processing, logistics,  and  handicrafts.  Lower  GST  rates  have  made  raw  materials  and  services  more affordable, motivating small and medium enterprises and start-ups to scale up operations, invest in innovation, and compete both domestically and globally.
- V. The Government aims for promotion of Export Diversification and has signed sixteen (16) Free Trade Agreements (FTAs) and six (06) Preferential Trade Agreements (PTAs) with several key trading partners. Government is working with all stakeholders to enable our exporters to better utilize  the  benefits  of  India's  FTAs  with  major  markets  such  as  Japan,  Korea,  UAE  etc.  and effectively utilize the opportunities that have been created with the recent concluded FTAs such as with the EFTA countries, UK, Oman , New Zealand and European Union.

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