Kotak Urges Support for SMEs Amid U.S. Tariff Shock
Billionaire banker Uday Kotak has warned that the latest U.S. tariffs on Indian exports amounting to nearly 50% have created a “major shock” for the economy. The tariffs come in response to India’s continued trade ties with Russia, particularly discounted crude oil purchases. Kotak said the development highlights India’s vulnerability and the urgent need to strengthen domestic capabilities.
Call for Direct Fiscal Support
Kotak stressed that the government should extend direct fiscal support to small and medium-sized enterprises (SMEs), especially in areas such as manufacturing, technology, and research. He explained that this step would not only stabilize affected industries but also encourage private equity and entrepreneurial investments. Industry leaders including Anand Mahindra and Harsh Goenka also backed this call, pressing for liquidity measures, infrastructure investments, and export incentives.
Balancing Shock with Opportunity
Despite the pressure, analysts believe India’s macroeconomic fundamentals remain strong, with a steady fiscal position and manageable current account balance. Still, experts warn that the tariffs could slow India’s GDP growth by up to 0.5 percentage points. Kotak argued that India must treat this moment as an opportunity to push reforms, scale up manufacturing, and build globally competitive brands. He added that India cannot remain complacent at a per capita GDP of $2,700 if it aims to become a middle-income nation in the near future.
