Indian MSMEs are under fresh pressure as former US President Donald Trump’s newly imposed tariffs threaten to derail more than $350 million worth of exports. These tariffs, which kicked in on April 5, are already impacting the margins of small businesses, many of which are still recovering from geopolitical disruptions like global wars and the Red Sea shipping crisis.

According to multiple exporters, port operators, and companies, US clients are now demanding heavy discounts to counter the impact of the 10% baseline tariff. In some cases, buyers are expecting Indian exporters to absorb the entire cost increase, putting MSME margins under serious strain.

“US customers want the Indian side to bear the brunt of the tariff hike, which is unsustainable for smaller exporters,” said one Mumbai-based textile exporter.

These new tariffs have caused a standstill in ongoing negotiations between Indian and American firms. As a result, export shipments worth over $350 million are now at risk, according to executives from major Indian ports.

The impact is particularly severe for micro, small and medium enterprises (MSMEs), which contribute significantly to India’s export ecosystem. Many of these firms operate on thin profit margins and lack the buffer to withstand steep tariff shocks.

“This sudden shift has left us with no choice but to start exploring alternative markets,” said an exporter from Gujarat. “Countries in Europe, Southeast Asia, and the Middle East are being evaluated for new trade ties.”

While the US has historically been one of the largest and most reliable markets for Indian exporters, this protectionist policy stance has triggered uncertainty. Businesses fear that if the situation continues, the damage could be long-term, forcing many firms to restructure their export strategies.

Moreover, the lack of clarity on how long the tariffs will last or whether they will be further increased is adding to the unease in trade circles.

This development underscores the urgent need for diversification in India’s export markets, especially for MSMEs, which are most vulnerable to abrupt global policy shifts.

As the global trade landscape becomes more unpredictable, Indian businesses are now taking steps to de-risk their operations, ensuring that they are not overly dependent on a single country, even if it’s a key partner like the US.