The Finance Ministry will hold a review meeting on Monday with public sector banks (PSBs) to assess the impact of the recent 50% US tariff hike on the micro, small, and medium enterprises (MSME) sector. The meeting will also evaluate credit needs and support measures, according to a senior official.
The meeting, chaired by Department of Financial Services Secretary M Nagaraju, aims to examine how external trade pressures are affecting MSMEs and ensure that sufficient credit continues under government schemes such as MUDRA and credit guarantee programs.
MSMEs in the engineering sector recently met RBI Governor Sanjay Malhotra to seek support in reducing borrowing costs and improving access to finance. According to EEPC India Chairman Pankaj Chadha, India’s engineering exports to the US average $20 billion, nearly 45% of total exports exposed to US tariffs, highlighting the sector’s vulnerability.
Chadha added that MSMEs struggle to obtain collateral-free loans, as banks demand high security and apply unfavorable credit ratings. He urged rating agencies to exclude US exposure from credit calculations this year to ease financial stress on exporters.
