Fri Sep 12 02:30:00 UTC 2025: Okay, here’s a news article summarizing the provided text:

**Karnataka’s MSMEs Face Crisis as US Tariffs Cripple Exports**

**Bengaluru, September 12, 2025** – Karnataka’s Micro, Small, and Medium Enterprises (MSMEs) are facing a severe crisis following the imposition of steep tariffs by the U.S. government, local media outlet The Hindu reports. The tariffs, implemented in July and August, have the potential to significantly cripple the productivity and profitability of the state’s industrial and export ecosystem, from garments to engineering goods.

Karnataka’s exports to the U.S. have nearly doubled in the last four years, reaching almost $8 billion. Trade bodies and industry players lament that the landed costs of their exports will be hit by 20% to 35% with immediate effect. They are already facing rising costs, falling orders, and mounting pressure from global competitors.

According to data from the Visvesvaraya Trade Promotion Centre (VTPC), textiles, apparel, gems, jewellery, leather goods, engineering goods, and auto components are among the hardest-hit sectors. The tariffs, combined with elevated supply chain expenses, are squeezing margins for companies that depend on U.S. markets.

Minister for Small Scale Industries and Public Enterprises Sharanabasappa Darshanapur admitted that U.S. tariffs would impact export-oriented units across multiple sectors, including garments, automobile components, aerospace products, food, etc.

Prashant Gokhale, president of the Bangalore Chamber of Industry and Commerce (BCIC), said that even small tariff hikes render exports uncompetitive, with competitors like Bangladesh and Vietnam already gaining orders at India’s expense. The tariffs are also causing production halts, order cancellations, and payment delays for some garment manufacturers in Bengaluru.

The Federation of Indian Export Organisations (FIEO) estimates that approximately 55% of India’s U.S.-bound shipments, valued at around $47 billion to $48 billion, are now exposed to pricing disadvantages of 30% to 35%.

Local trade bodies and associations such as the Federation of Karnataka Chambers of Commerce & Industry (FKCCI) and the Karnataka Small Scale Industries Association (KASSIA) are advocating for government intervention, including financial packages, export incentives, and support for market diversification. They are also exploring technical assistance for MSMEs and easier access to credit.

Industry leaders urge exporters to reduce their dependency on the U.S. market by strengthening ties with other global markets.

While the State government has promised to assess the severity of the impact and implement remedial measures, stakeholders are emphasizing the need for swift and strategic action from both the Central and State governments to safeguard business, in addition to supporting the exporter community through policy intervention, export incentives, and improved logistics and finance access.

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