US Tariffs and the MSME Crisis: A Call for a Strategic Trade Policy Shift
UPSC Relevance
Prelims: Indian Economy (MSME Sector, Foreign Trade, Government Schemes), International Relations (India-US relations).
Mains:
GS Paper 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment; Effects of liberalization on the economy.
GS Paper 2: India and its neighborhood- relations; Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
Key Highlights from the News
Main Event: The imposition of 25% US tariffs on Indian products is adversely affecting the country's export sector, especially Micro, Small, and Medium Enterprises (MSMEs).
Most Affected Sectors: The seafood and textiles sectors, which employ millions, are facing the biggest crisis.
Government's Response:
Urged industries to "bravely face" the tariffs.
Considering revising the Export Promotion Mission (EPM) announced in the 2025 budget. This will include the Ministries of Textiles and Fisheries.
However, the government has clarified that direct subsidies will not be provided.
Industry Demands:
Temporary extension of time for loan repayments (moratorium).
Provision of interest subvention.
Article's Main Argument: India's policy of over-reliance on its relationship with the US has failed. To overcome this crisis, India must make a significant change in its trade policy.
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