New Delhi, Oct. 7 -- Gross non-performing assets (NPAs) in the banking system's micro, small, and medium enterprises (MSME) portfolio are projected to rise moderately to around 3.9 percent by the end of FY26, driven primarily by recent steep tariffs imposed by the United States on Indian exports, according to a report by Crisil Ratings.

MSMEs account for approximately 17 percent of outstanding bank loans, with sectoral NPAs at 3.59 percent at the close of FY25.

"This fiscal, we see NPAs in the MSME sector increasing moderately to 3.7-3.9 per cent. This is primarily due to the recent, steep hike in tariffs announced by the US," said Crisil director Subha Sri Narayanan, reported PTI.

Narayanan added that the tariffs will affect export-or...