**Executive Summary**
This document is an answer to the Lok Sabha Unstarred Question No. 2194, addressed on February 12, 2026, concerning the impact of global trade disruptions on Micro, Small, and Medium Enterprises (MSMEs). It details government efforts to mitigate the impact of US tariffs, including a multi-pronged strategy and various support schemes like the Export Promotion Mission (approved on November 12, 2025), Prime Minister's Employment Generation Programme (PMEGP) and Credit Guarantee Scheme (CGS) for Micro & Small Enterprises (MSEs). The document also provides data on assistance released and guarantees approved up to January 31, 2026, and state-wise details of MSME support.
**Key Points / Main Content**
* **Mitigation of US Tariff Impact:**
* The government is engaging with the US for a mutually beneficial trade agreement.
* RBI Trade relief measures and Credit Guarantee Scheme for Exporters have been implemented.
* Enhancement of domestic demand through next generation GST reforms.
* New Export Promotion Mission (EPM) to support exporters has been launched and was approved on November 12, 2025.
* Pursuit of FTAs with new countries and better utilization of existing FTAs to diversify trade.
* **Government Support Schemes:**
* **Export Promotion Mission (EPM):** Approved on November 12, 2025, it provides support through NIRYAT PROTSAHAN (trade finance facilitation) and NIRYAT DISHA (non-financial support).
* **Prime Minister's Employment Generation Programme (PMEGP):** Provides margin money subsidy to beneficiaries, with higher subsidies for special categories and rural areas.
* **Credit Guarantee Scheme (CGS) for Micro & Small Enterprises (MSEs):** Provides credit guarantee up to Rs. 10 crore.
* **Self Reliant India (SRI) Fund:** Aims to infuse Rs. 50,000 crore as equity funding in MSMEs with growth potential, including a Rs 2000 crore top up announced in Budget 2026-27.
* **Micro and Small Enterprises Cluster Development Programme (MSE-CDP):** Offers financial assistance for Common Facility Centers (CFCs) and industrial estate development.
* **Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME):** Offers credit guarantee cover to lenders for term loans up to Rs.100 crore for MSME projects involving the purchase of equipment/machinery.
* **Data on Assistance and Guarantees:**
* The document provides a table detailing CGS guarantees approved by State/UT until January 31, 2026.
* A state-wise breakdown of micro-enterprises assisted, margin money subsidy released, and estimated employment generated under PMEGP for the fiscal year 2025-26 is presented.
* **Additional Initiatives Under PMEGP:**
* Increasing the maximum project cost to Rs. 50 lakh for manufacturing and Rs. 20 lakh for the service sector.
* Including applicants from Aspirational districts and Transgenders under special categories for higher subsidies.
* Acceptance of PMEGP applications in 19 regional languages.
* Enhancing the scope of activities by modifying Negative list to include more activities under Animal Husbandry.
* Model project reports made available to applicants.
* EDP training provided.
* Awareness programmes conducted.
* **Interest Subvention/Special Relief Package for MSMEs:**
* There is no such scheme in the Government of India.
**Impact Analysis**
**Exporters**
*Impact:* Affected by US tariff measures and global trade disruptions. Can benefit from government mitigation strategies and support schemes.
*Action Required:* Engage with the government through Export Promotion Councils (EPCs) and industry associations to assess the impact of the US tariff measures and to explore available support mechanisms like Export Promotion Mission (EPM).
**MSMEs**
*Impact:* Impacted by global trade disruptions, tariff uncertainties, and financing delays. Can benefit from government schemes like PMEGP, CGS, SRI Fund, and MSE-CDP.
*Action Required:* Utilize available schemes for financial assistance, credit support, and technology adoption. Explore the Self-Reliant India (SRI) Fund for equity funding and the Credit Guarantee Scheme for loans.
**Export Promotion Councils (EPCs), Industry Associations, and State Governments**
*Impact:* Vital in assessing the impact of U.S. tariff measures.
*Action Required:* Collaborate with the government to assess the impact of US tariff measures, participate in initiatives to diversify and strengthen trade relationships. State Governments work with Central Government to provide infrastructure and cluster development.
**General Category and Special Category Beneficiaries**
*Impact:* Ability to be approved for the PMEGP, enabling financial assistance with Margin Money Subsidy.
*Action Required:* Utilize PMEGP for Margin Money Subsidy.
Key Entities Referenced
Ministry of Micro, Small and Medium Enterprises: The primary government body responsible for policies and schemes related to MSMEs in India.
Prime Minister's Employment Generation Programme (PMEGP): A scheme to assist beneficiaries in setting up micro-enterprises with margin money subsidy.
Credit Guarantee Scheme (CGS) for Micro & Small Enterprises (MSEs): A scheme that provides credit guarantee for loans extended to MSEs through CGTMSE, up to Rs. 10 crore.
Self Reliant India (SRI) Fund: Fund aimed at infusing equity funding in MSMEs with growth potential.
Tamil Nadu: A state specifically mentioned in the question regarding the impact of global trade disruptions on MSME clusters.
GOVERNMENT OF INDIA
MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES
LOK SABHA
UNSTARRED QUESTION NO. 2194
TO BE ANSWERED ON 12.02.2026
IMPACT OF GLOBAL TRADE DISRUPTIONS ON MSMEs
2194. DR. T SUMATHY Alias THAMIZHACHI THANGAPANDIAN:
Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:
(a) whether the Government has assessed the impact of global trade disruptions and tariff
uncertainties on Micro, Small and Medium Enterprises (MSMEs) clusters in Tamil Nadu, particularly
in Chennai and Hosur, where nearly thirty lakh jobs are at risk and if so, the details thereof;
(b) whether any interest subvention, export incentive or special relief package has been approved
for MSMEs affected by external factors and recent cyclones and if so, the details thereof;
(c) whether it is a fact that the Rupees 95 billion MSME financing plan for the year 2026 has
witnessed delays in disbursement to eligible units in Tamil Nadu and if so, the details thereof;
(d) the details of MSME assistance released during the year 2025–26, State-wise; and
(e) the steps proposed to stabilise employment and exports in MSME-intensive States like Tamil
Nadu?
ANSWER
MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES
(SUSHRI SHOBHA KARANDLAJE)
(a),(b),(d)&(e): India’s merchandise exports during April to October 2025 have demonstrated
resilient performance despite challenging global conditions including recent U.S. tariff hike. Overall,
merchandise exports for the fiscal year so far remain positive compared to the previous year, reflecting
underlying resilience despite global economic volatility, geopolitical disruptions and softened demand
in some markets. India’s export sector continues to demonstrate strength and diversification amid
challenging external conditions.
Government continues to work to mitigate the impact of the US tariff measures on Indian
exports through a comprehensive multi-pronged strategy encompassing intensive engagement with the
US Government for a mutually beneficial India-US Bilateral Trade Agreement, immediate relief
through Trade relief measures of RBI, Credit Guarantee Scheme for Exporters, enhancement of
domestic demand through next generation GST reforms, Export Promotion measures such as the new
Export Promotion Mission which provide support and assistance to our exporters, pursuing FTAs with
new countries and better utilization of existing FTA. It is expected that these measures will also
enhance diversification and resilience in India’s trade relationships. The Government remains engaged
with all stakeholders—including exporters, Export Promotion Councils (EPCs), MSMEs, industry
associations, and state governments—to assess the evolving impact of the U.S. tariff measures.: 2 :
Export Promotion Mission (EPM) has been approved on 12.11.2025 as a comprehensive
framework to strengthen the overall export ecosystem. Under EPM, support shall be provided through
NIRYAT PROTSAHAN, which focuses on trade finance facilitation including support for interest
subvention, factoring, E-Commerce Credit Card, Collateral for export Credit etc. for MSME exporters,
and NIRYAT DISHA, which shall provide non-financial support including export-quality and
compliance assistance, market-access interventions, logistics facilitation, and export ecosystem-
building measures.
The Central Government supplements the efforts of the State/UT Governments through various
schemes, programmes and policy initiatives for credit, skill development, infrastructure and cluster
development etc. This inter alia includes initiatives for providing financial assistance, credit support
and technology adoption through Schemes like Prime Minister’s Employment Generation Programme
(PMEGP), Credit Guarantee Scheme (CGS) for Micro & Small Enterprises (MSEs), Self Reliant India
(SRI) Fund, Micro & Small Enterprises Cluster Development Programme (MSE-CDP), Mutual Credit
Guarantee Scheme for MSMEs (MCGS-MSME) etc.
(i) Prime Minister's Employment Generation Programme (PMEGP) assists General Category
beneficiaries with Margin Money (MM) subsidy of 25% of the project cost in rural areas and
15% in urban areas. For beneficiaries belonging to Special Categories such as Scheduled Castes,
Scheduled Tribes, OBCs, Minorities, Women, Ex-servicemen, Physically Handicapped,
Transgenders, beneficiaries belonging to Northeastern Region, Hill and Border areas, and
Aspirational Districts, the Margin Money subsidy is 35% in rural areas and 25% in urban areas.
(ii) Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs) through Credit
Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to provide credit guarantee of
upto Rs. 10 crore.
(iii) Self Reliant India (SRI) Fund to infuse Rs. 50,000 crore as equity funding in those MSMEs
which have the potential and viability to grow and become large units. Under this scheme total
size of fund of Rs. 50,000 crore has a provision of Rs.10,000 crore from Government of India
and Rs.40,000 crore through Private Equity / Venture Capital funds. This initiative is aimed at
providing growth capital to the deserving and eligible units of MSME sector. The Budget 2026-
27 has also announced a support of Rs 2000 crore to top up the Self-Reliant India Fund set up in
2021 to continue support to micro enterprises and maintain their access to risk capital.
(iv) Micro and Small Enterprises Cluster Development Programme (MSE-CDP) with the objective to
enhance the productivity and competitiveness of Micro and Small Enterprises (MSEs) by
extending financial assistance for establishment of Common Facility Centers (CFCs) and
creation and up-gradation of industrial estates. Establishment of Flatted Factory Complexes is
also supported under the scheme. For CFCs, Government of India Grant is up to 80%, upper
limit of Project cost is Rs. 30 crore whereas, for ID projects Government of India Grant is up to
70%, upper limit of Project is Rs. 15 crore.
(v). Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME), a government-backed initiative
designed to help Micro, Small, and Medium Enterprises (MSMEs) access loans to grow their
businesses. This scheme offers a credit guarantee, making it easier for MSMEs to obtain loans,
especially for purchasing essential equipment and machinery. The Scheme provides credit
guarantee cover to lenders (Scheduled Commercial Banks, All India Financial Institutions,
NBFCs) for their term loans up to Rs.100 crore to MSMEs for their projects involving purchase
of equipment/machinery.: 3 :
(i) Credit Guarantee Scheme for Micro and Small Enterprises
Ministry of MSME implements Credit Guarantee Scheme (CGS) for Micro and Small Enterprises
(MSEs) through Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to provide
credit guarantee for loans extended to MSEs. The ceiling for guarantee coverage under the scheme is
Rs 10 crore.
State/UT wise details for credit guarantees extended to MSEs under CGS are as under:
CGS - Guarantees approved- FY 2025-26 till 31.01.2026
Amount
Sr. No. of guarantees
States / UTs approved (in Rs.
No. approved
crore)
1 Andaman and Nicobar Islands 784 159
2 Andhra Pradesh 1,08,511 11,030
3 Arunachal Pradesh 1,555 476
4 Assam 37,868 6,389
5 Bihar 1,33,308 12,965
6 Chandigarh 6,190 1,555
7 Chhattisgarh 29,736 4,984
8 Delhi 47,529 14,258
9 Goa 3,762 749
10 Gujarat 95,972 30,626
11 Haryana 58,598 12,219
12 Himachal Pradesh 22,625 2,649
13 Jammu And Kashmir 38,091 2,900
14 Jharkhand 48,786 6,537
15 Karnataka 1,19,785 22,436
16 Kerala 59,937 8,882
17 Ladakh 494 101
18 Lakshadweep 47 2
19 Madhya Pradesh 85,966 14,735
20 Maharashtra 1,98,036 46,554
21 Manipur 2,132 251
22 Meghalaya 2,347 416
23 Mizoram 1,694 194
24 Nagaland 1,535 229
25 Odisha 66,545 10,755
26 Puducherry 2,487 380
27 Punjab 64,722 10,551
28 Rajasthan 98,300 16,183
29 Sikkim 1,115 176
30 Tamil Nadu 1,22,789 23,606
31 Telangana 72,898 14,333
32 The Dadra and Nagar Haveli and Daman and Diu 1,102 367
33 Tripura 9,240 764
34 Uttar Pradesh 4,45,336 37,211
35 Uttarakhand 23,895 3,410
36 West Bengal 1,35,778 20,289
Total 21,49,495 3,39,321: 4 :
(ii) Prime Minister's Employment Generation Programme (PMEGP) assists General Category
beneficiaries with Margin Money (MM) subsidy of 25% of the project cost in rural areas and 15% in
urban areas. For beneficiaries belonging to Special Categories such as Scheduled Castes, Scheduled
Tribes, OBCs, Minorities, Women, Ex-servicemen, Physically Handicapped, Transgenders,
beneficiaries belonging to Northeastern Region, Hill and Border areas, and Aspirational Districts, the
Margin Money subsidy is 35% in rural areas and 25% in urban areas.
State-wise detail of number of micro enterprises assisted, margin money subsidy released and estimated
employment generated under PMEGP in the current financial year i.e., 2025-26 (as on 10.02.2026), is
given below:
MM Subsidy
S. Micro Enterprises Estimated employment
State released
No. Assisted generation
(in crore)
1 Andaman Nicobar Island 33 0.53 264
2 Andhra Pradesh 5,825 193.77 46,600
3 Arunachal Pradesh 70 4.59 560
4 Assam 1,510 45.09 12,080
5 Bihar 4,285 127.52 34,280
6 Chandigarh 2 0.06 16
7 Chattishgarh 888 36.18 7,104
8 Delhi 14 0.60 112
9 Goa 23 1.05 184
10 Gujarat* 1,722 192.35 13,776
11 Haryana 932 56.96 7,456
12 Himachal Pradesh 608 22.90 4,864
13 Jammu & Kashmir 6,175 128.78 49,400
14 Jharkhand 729 21.85 5,832
15 Karnataka 3,108 122.88 24,864
16 Kerala 1,958 50.95 15,664
17 Ladakh 138 6.18 1,104
18 Lakshadweep - 0.00 -
19 Madhya Pradesh 1,658 80.00 13,264
20 Maharashtra** 2,299 121.48 18,392
21 Manipur 298 7.32 2,384
22 Meghalaya 386 12.36 3,088
23 Mizoram 191 7.19 1,528
24 Nagaland 455 8.69 3,640
25 Odisha 2,654 85.48 21,232
26 Puducherry 16 0.47 128: 5 :
27 Punjab 1,124 74.11 8,992
28 Rajasthan 1,517 115.88 12,136
29 Sikkim 202 6.89 1,616
30 Tamil Nadu 5,575 172.81 44,600
31 Telangana 2,148 94.14 17,184
32 Tripura 382 9.83 3,056
33 Uttar Pradesh 6,802 289.17 54,416
34 Uttarakhand 509 20.21 4,072
35 West Bengal 759 31.77 6,072
Total 54,995 2150.02 439,960
* Including Daman and Diu ** Including Dadra Nagar and Haveli
Initiatives undertaken by the Ministry of MSME under PMEGP to promote the entrepreneurship
across the country including Tamil Nadu, are as follows:
i. Enhancement of maximum project cost from Rs. 25 lakh to Rs. 50 lakh for manufacturing
sector and from Rs. 10 lakh to Rs. 20 lakh for service sector.
ii. Inclusion of applicants from Aspirational districts and Transgenders under special category
eligible for higher subsidy.
iii. Acceptance of PMEGP applications from beneficiaries in physical form in 19 regional
languages since June 2025 excluding Hindi and English.
iv. Enhancing the scope of activities by modifying Negative list to allow more activities under
Animal Husbandry like dairy, poultry, aquaculture and sericulture.
v. A wide range of more than 1,000 Model of Detailed Project Reports have been prepared on
various industries and made available on the PMEGP online portal enabling applicants to
submit quality DPRs.
vi. Entrepreneurship Development Programme (EDP) training is provided to prospective
entrepreneurs and beneficiaries to provide orientation and awareness pertaining to various
managerial and operational functions like finance, production, marketing, enterprise
management etc.
vii. Awareness programmes in all the States/UTs including backward and under-performing areas,
Aspirational districts, North Eastern Region etc..
(c): NIL, There is no such scheme in Government of India
*****