SMEs Urge Government for Immediate Credit and Market Access Support to Protect the Backbone of Industry

New Delhi: The recent U.S. tariffs pose a significant threat to small and medium enterprises (SMEs) in India, which are crucial to the national economy. Many of these businesses are bracing for potential job losses and may find it harder to access bank credit. Just like during the COVID-19 crisis, these entrepreneurs are looking to the government for support.

Vinod Kumar, President of the India SME Forum, highlighted that Indian products often fetch high prices in the U.S. These exports are lucrative, but finding other markets that can match those prices will be tough. He pointed out that even if alternative markets are identified, maintaining profit margins could be problematic. Many SMEs might see their profits dwindle even within domestic markets.

SME Strategies in Response to Tariffs

To adapt to these challenges, the India SME Forum has reached out to about 100,000 members. Recently, 7,020 enterprises responded to a survey regarding the impact of U.S. tariffs. Interestingly, 16% of these businesses are considering outsourcing some orders to foreign companies to keep their buyers.

Moreover, 57% of respondents are exploring alternatives in the GCC region, Mercosur, Africa, and the UK for rerouting shipments to the U.S. Another 27% are looking to revive interest from markets outside the U.S., even if it means settling for lower prices.

Most exporters believe the tariffs are a short-term issue that could resolve in 60 to 90 days with government assistance. Many think U.S. customers will struggle to find similar quality from non-Indian suppliers and are waiting for the government to help explore new, friendly market opportunities.

Appeal to the Government

The India SME Forum has formally requested government intervention to navigate this challenging landscape. In a letter to Cabinet Secretary TV Somanathan, they proposed creating Trade Desks and Export Marketing Outposts in key global locations. They also suggested establishing bonded warehouses for quicker logistics and providing skilled professionals to market Indian MSME products internationally.

Additionally, they recommended setting up priority export working-capital windows through SIDBI and other financial institutions. They advocate for quick funding—ideally within a week—for businesses already vetted to ensure production continues and jobs remain secure.

Turning Crisis into Opportunity

Both the government and SMEs hope to convert this challenge into an opportunity with timely assistance. Vinod Kumar emphasized the need for tailored support for small businesses, distinct from what larger corporations receive. This approach could be key to helping small entrepreneurs navigate the current landscape.

As the situation unfolds, it is clear that SMEs are resilient. Recent surveys show that Indian business owners are actively seeking innovative solutions to maintain their market positioning and sustain their livelihoods.

For more information on ongoing support measures for Indian SMEs, visit the India SME Forum.

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GOVERNMENT, SMALL MEDIUM ENTERPRISES, BUSINESS, MARKET NEWS, SMES, SMES PUSH GOVT FOR RAPID CREDIT AND MARKET ACCESS SUPPORT