New Delhi – The Finance Ministry will sit down with public sector banks this Monday to discuss how the 50‑percent tariff hike on the US market is hurting India’s micro, small and medium‑size enterprises (MSMEs). A senior official said the meeting will focus on the extra pressure the tariffs are putting on exporters and how banks can keep credit flowing to help them survive.
The session, chaired by Department of Financial Services Secretary M Nagaraju, will examine how trade sanctions are affecting MSME businesses and will look at whether existing government schemes keep up with their needs. The review will cover funding channels such as the MUDRA scheme and the government’s credit‑guarantee programmes.
In the engineering sector, representatives recently met RBI Governor Sanjay Malhotra to point out how the new US tariffs expose their businesses to risk and to ask for help in cutting borrowing costs for exporters. EEPC India Chair Pankaj Chadha said that India’s engineering exports to the U.S. total about $20 billion—roughly 45 % of all goods that face U.S. duties. He urged the government to act swiftly to protect the industry.
Chadha also highlighted that many MSMEs struggle to get bank loans because lenders demand large collateral and use credit‑rating systems that can unfairly penalise exporters. The higher collateral and interest rates mean that MSMEs pay more than they should. He suggested that rating agencies skip U.S. exposure when scoring credit for this year, as the tariffs’ impact on credit ratings could be a distortion.
Overall, the meeting aims to keep the flow of credit through schemes like MUDRA steady, ensure that banks offer collateral‑free export financing where possible, and keep MSME exporters afloat amid mounting external trade pressures.
Source: ianslive
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