Happy #VignahartaChaturthi

Today marks an extraordinary juxtaposition in India's economic narrative. As we celebrate Ganesh Chaturthi—invoking the Lord who removes our obstacles, we simultaneously witness the implementation of punitive 50% US tariffs on Indian goods, the highest levied on any major trading partner. The 50% tariffs, which took effect today, represent a doubling of the initial 25% levies imposed earlier this month, positioning India alongside China in facing America's steepest trade penalties. These aren't merely numbers on a policy document; they represent an existential challenge for India's economic backbone—our MSMEs. MSMEs contribute 45% to India's exports and account for nearly half of our $434 billion merchandise export engine. More critically, these enterprises form the circulatory system of rural India, sourcing materials and labor from the hinterland while providing employment to entire communities. The timing couldn't be more challenging. Our small businesses are simultaneously navigating two seismic shifts:

• National transformation: GST simplification that promises relief but requires careful implementation
• Global disruption: Trade barriers that threaten decades of market access

The real impact won't be immediate—current orders placed in advance will cushion the next two months. But the post-monsoon export season feeding into the Christmas cycle will reveal the true extent of this challenge.

The most vulnerable sectors—textiles, gems and jewelry, seafood, and chemicals—represent exactly where MSMEs have their strongest foothold, with over 70% market share in textiles and gems, and 40% in chemicals. These are precisely the labor-intensive industries that employ millions in rural and semi-urban India.

For gems and jewelry exporters, particularly in Surat where MSMEs dominate with over 80% of diamond exports, the impact will be immediate and devastating. Similarly, shrimp exporters who send more than half their output to the US face steep losses and order cancellations. This moment demands unprecedented coordination from India's entire business ecosystem. Our recommendation centers on three critical pillars:

1. Financial Institution Leadership

Public Sector Banks, with their vast resources and rural reach, must proactively:

• Provide strategic guidance on market diversification and product portfolio expansion
• Offer flexible repayment structures without waiting for regulatory directives
• Expand credit access for MSMEs pivoting to new markets or upgrading capabilities

2. Government Policy Agility

While Hon. Commerce Minister Piyush Goyal seems to have ruled out direct subsidies, targeted measures like interest subsidies, loan guarantees, and reduced certification fees for MSMEs are being considered. These need acceleration alongside:

• Simplification of GST filing processes
• Resolution of input tax credit issues
• Enhanced export promotion schemes targeting non-US markets

3. Corporate Partnership Models

Larger corporates must recognize MSMEs as critical supply chain partners and invest in their resilience through technology transfer, working capital support, and market access facilitation.

The Path Forward: Resilience Through Diversification

India can leverage the recently concluded UK trade deal and potential EU agreements to offset US market losses. Market diversification beyond the US and EU—exploring untapped opportunities across Asia, Africa, and Latin America—represents our most sustainable response.

The irony is stark: on a day dedicated to removing obstacles and ensuring prosperity, we face perhaps the most significant trade challenge in recent memory. Yet this crisis also presents an inflection point—an opportunity to build a more diversified, resilient export ecosystem that reduces over-dependence on any single market.

As one expert noted, "India's MSME sector is not fragile—it is flexible. With the right policy push, what seems like a setback today could transform into an inflection point for export reform and strategic global alignment."

Lord Ganesh is revered not just as the remover of obstacles, but as the deity who transforms challenges into opportunities through wisdom and perseverance. As our MSMEs face this trade war storm, the very spirit of this auspicious day reminds us that with collective wisdom, coordinated action, and unwavering support for our smallest enterprises, we can emerge stronger. The question isn't whether we'll weather this challenge—it's whether we'll use it to build the foundations for a more robust, diversified, and resilient economic future. Our MSMEs deserve nothing less than our complete and unequivocal support in this defining moment. The next six months will determine not just our export performance, but the livelihoods of millions who depend on India's entrepreneurial engine. The time for action is now.

In pursuit of wisdom, prosperity and good fortune for our rural citizens, we at Head Held High Foundation launched the first #JANAI Conclave at Indian Institute of Information Technology (IIIT) Dharwad and we were fortunate to have Santanu Bhattacharya , Professor, MIT join us for this day-long summit. His linked-in post is a terrific reflection of the event here:

I was particularly enthused by the energetic participation of our young students and their orientation of using AI as a force for good.. read Aamir Gheewale post here on his learnings from the Summit:

Thanks for all our partners - Indian Institute of Information Technology (IIIT) Dharwad , Karnataka Digital Economy Mission (KDEM) and others who came together powerfully to make it happen..!

On Friday and Saturday, in the same vein of ushering in entrepreneur's growth, all the TiE Chapters of India, Asia met up for a 2-day intense baithak to reflect on our learnings and plan ahead.. enjoyed meeting with Presidents & Exec. Director of other chapter, and reiterating our commitment to entrepreneurship!

Finally, in the same theme of removing obstacles for our students in their pursuit of skills, jobs and entrepreneurship, a few of us visited the World Skill Center, Bhubaneswar - where we learnt about their models of creating large-scale employment for the youth of Orissa.. lots of insights and ideas from this visit, facilitated by ABD..!

May Lord Ganesh remove all our obstacles as we march toward #ViksitBharat!

Ganapati Bappa Morya!