Fashion
US tariff blow puts Indian MSMEs on the brink
The United States’ decision to impose an additional 25 per cent tariff on Indian imports, raising the total duty to 50 per cent, is sending shockwaves through India’s business landscape.
The US’ imposition of 25 per cent additional tariff on Indian imports has raised the total duty to 50 per cent, creating deep uncertainty for the MSMEs.
As per reports, Panipat and Ludhiana are amongst the hardest hit by the US tariffs.
However, the latest media reports suggest the government is now planning dedicated outreach programmes in 40 countries to counter the steep US tariffs.
Reports indicate nearly 50 per cent of India’s exports to the United States, valued at around $87.3 billion, will face the steep 50 per cent tariff. This will significantly impact the key sectors, including textiles and apparel, gems and jewellery, seafood, and leather goods.
Meanwhile, analysts estimate a GDP reduction between 0.2 per cent and 1 per cent in FY26, with a potential economic contraction of $7 billion to $25 billion, depending on price adjustments and finding new markets while a CRISIL report highlighted that higher US tariffs will have a significant impact on India’s MSME sector, which accounts for approximately 45 per cent of the country’s total exports. Among the hardest hit will be textiles and gems & jewellery, which together make up an estimated 25 per cent of India’s exports to the US.
In cities like Panipat and Ludhiana — two major industrial hubs and home to a large number of MSMEs— the abrupt escalation of US tariffs has triggered a fresh wave of uncertainty, particularly among MSMEs, which form the backbone of the export economy.
Known as India’s “Textile City,” Panipat in Haryana is globally recognised for its production of yarn, home textiles, and recycled fabrics. However, since the imposition of the initial 25 per cent reciprocal tariff by the US, Panipat’s supply chains had been facing serious disruptions, and now, with the additional 25 per cent tariff coming into effect, the implications are going to be devastating expressed fears some industry stakeholders interacting with Fibre2Fashion.
Panipat’s yarn industry, which boasts an annual turnover of about ₹60,000 crore, relies on exports worth ₹20,000 crore — 60 per cent of which are destined for the US, as per some estimates. This makes the city one of the most exposed to Washington’s aggressive trade stance. Already strained by ongoing global crises such as the Russia-Ukraine conflict, high freight costs, and inflation in key international markets like Europe and South America, the industry is struggling to absorb yet another external shock.
For the city’s yarn spinners, exporters, and small-scale crafters, the implications are dire. Increased duties mean Indian products will be significantly less competitive in the US market. Order volumes are expected to drop drastically as American buyers seek cheaper alternatives in other countries. Local businesses, especially the smaller ones, are worried about payment delays, the spectre of cancelled contracts and mass layoffs.
Meanwhile, Ludhiana, an important export hub in the state of Punjab, is also said to be facing its own set of challenges. The city, which exports a wide range of goods including textiles, hosiery, auto parts, hand tools, and machinery, is said to be staring at a revenue loss of over ₹10,000 crore because of the US tariffs, as per some estimates.
According to reports, more than 300 companies in Ludhiana are directly engaged in trade with the American market, and the sudden cost escalation will only push them into crisis mode. With roughly ₹6,000 crore worth of textile and hosiery goods shipped annually to the US, as per some estimates, the stakes for Ludhiana’s manufacturers could not be higher.
The tariffs come at a time when exporters in Ludhiana are already under pressure from fluctuating demand, rising input costs, and stiff global competition. The industry now faces the grim prospect of large-scale order cancellations, job loss and even existential threat for some.
However, there now appears to be a glimmer of hope. According to the latest media reports, the Government is now planning dedicated outreach programmes in 40 countries to counter the steep US tariffs. The list reportedly includes key markets such as Australia, Belgium, Canada, France, Germany, Italy, Japan, Mexico, Poland, Russia, Spain, South Korea, Turkiye, the Netherlands, the United Arab Emirates, and the United Kingdom.
Experts have long emphasised that diversifying into new markets and exploring alternative geographies is crucial for survival, and with the Government’s active help, hopefully the industry is able to navigate its way out of the crisis soon.
Fibre2Fashion News Desk (DR)
Woven garment exports slightly outpaced knitted garment exports in terms of growth. Knitwear exports (Chapter **) rose by *.** per cent to $*.*** billion, compared to $*.*** billion in the same period of fiscal ****–**. Woven apparel exports (Chapter **) increased by *.** per cent to $*.*** billion, up from $*.*** billion in July–September ****, EPB data showed.
Home textile exports (Chapter **, excluding ******) also grew, rising by *.** per cent to $***.** million, compared to $***.** million in the same period of the previous fiscal. Collectively, exports of woven and knitted apparel, clothing accessories, and home textiles accounted for **.** per cent of Bangladesh’s total exports, which stood at $**.*** billion during the period. Higher demand for diversified and value-added textile products supported this growth.
Slightly more than half of the various industrial sectors produced less than they did one year previously. Of the eight largest industrial sectors, output rose the most sharply in the repair and installation of machinery, while it fell the most sharply in the transport equipment industry.
A more accurate picture of changes in short-term output is obtained when the figures are adjusted for seasonal effects and the working-day pattern. After adjustment, manufacturing output rose by 1.7 per cent in August relative to July, CBS said in a press release.
In August 2025, Dutch manufacturing output remained unchanged year-on-year, although output declined in over half of the industrial sectors.
After seasonal adjustment, output rose by 1.7 per cent compared to July.
The strongest growth was seen in the repair and installation of machinery, while transport equipment recorded the sharpest decline.
After adjusting for seasonal and working-day effects, manufacturing output often fluctuates significantly. In the spring of 2020, output declined rapidly, reaching a low point in May 2020. This was followed by an upward trend until May 2022. The trend has reversed since then.
Producer confidence was less negative in September than it was in August. Manufacturers were more positive regarding output for the next three months, in particular.
Germany is an important market for the Dutch manufacturing sector. In September, German manufacturers were more negative than they were in August, as reported by Eurostat. In August, the calendar-adjusted output of the German manufacturing sector was down by 5.1 per cent, year on year. Relative to July, output fell by 5.5 per cent, as reported by Destatis.
Fibre2Fashion News Desk (RR)
The first subprogramme, approved in 2022, introduced pivotal policy measures that guided the energy sector toward a more efficient and renewable development pathway. Building on this foundation, subprogramme 2 advances regulatory reforms to strengthen the energy efficiency framework and enhance policy clarity to attract private sector investment. A key milestone under the subprogramme is the introduction of the country’s first set of regulations establishing Minimum Energy Performance Standards for electrical appliances, starting with air conditioners, which account for the largest share of energy consumption in the residential sector, ADB said on its website.
Subprogramme 2 will also establish an Energy Efficiency Revolving Fund aimed at facilitating access to finance for local small and medium-sized enterprises (SMEs) to invest in energy-efficient technologies. The revolving fund will be set up through a financial intermediation structure to enable local banks to extend loans to SMEs for energy efficiency investments. By mobilizing domestic financial institutions and supporting SMEs, the revolving fund is expected to accelerate the nationwide scale-up of energy efficiency investments.
Asian Development Bank (ADB) has approved $82.5 million for Phase 2 of Cambodia’s Energy Transition Sector Development Programme to support clean energy through policy reforms and investments.
The programme introduces energy efficiency standards, establishes a revolving fund for SME financing, and also aims to attract private investment.
“ADB is honoured to support Cambodia in its ambitious and transformative journey in the energy sector. Through a comprehensive reform package, combining policy support with strategic investments, the Energy Transition Sector Development Programme will support turning the government’s ambitious vision into reality,” said ADB acting country director for Cambodia Anthony Gill. “This includes the goal of achieving 70 per cent renewable energy in the power mix by 2030, along with a strong commitment to advancing energy efficiency, which is essential to ensure that Cambodia’s growth remains both sustainable and affordable.”
Subprogramme 2 will be followed by a third phase in 2027, which will further deepen reforms by expanding the energy efficiency regulatory framework and introducing technical standards for renewable energy, buildings, and industry to further attract private sector investment.
Fibre2Fashion News Desk (RR)
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