Bengaluru: Karnataka’s rapidly evolving agri startups and micro, small, and medium enterprises (MSMEs) in the state’s food processing sector are facing an immediate challenge as the ongoing tariff tussle with the United States threatens to slow their growth by nearly 6-7%.With the US being one of the state’s biggest destinations for processed agri and horticultural products, the stand-off has prompted govt bodies to safeguard the economic interests of these startups and protect the livelihood of small and marginal farmers dependent on exports.To cushion the impact, Karnataka Agribusiness Development Corporation (KABDC) and Karnataka State Agricultural Produce Processing and Export Corporation (KAPPEC) are actively exploring opportunities in Latin America, South Korea, Australia, Singapore, and the Middle East. Speaking at a workshop on protecting the interests of Indian agribusiness at the Institution of Agricultural Technologists in Bengaluru, officials said these regions not only present untapped demand for Indian products but also reduce dependence on traditional markets.KAPPEC managing director CN Shivaprakash said Karnataka registered over 6,000 startups in the past five years, empowering farmers and creating jobs for more than 25,000 people. “The ongoing US tariff dispute could dent the confidence of young entrepreneurs driving innovation in value-added foods, ready-to-eat products, organic produce, and nutraceuticals. Many rely heavily on export incentives and stable access. A prolonged tariff war could mean shrinking profit margins and delayed expansion,” he warned.KABDC general manager HK Shivakumar added that most startups were supported under the PM Formalisation of Micro Food Processing Enterprises (PMFME) scheme. “Their collective investment exceeds Rs 800 crore across 200 categories. Without diversifying markets, the tariff burden could impact them by 6–7 per cent in the coming months,” he said.The state govt has also set a target to support another 5,000 agri startups by 2025. Already, KAPPEC has received over 2,000 proposals. To strengthen the ecosystem, centres of excellence have been set up in Kolar (tomato products), Chikkamagaluru (spices and coffee), and Chamarajanagar (turmeric).While the US tariff stand-off poses challenges, officials believe Karnataka’s proactive push into new geographies and focus on high-demand categories could turn the crisis into an opportunity for its agri start-ups to expand their global footprint.—–Box-1Startups leading Brown Revolution-Millets-based startups: 2,057-Oil seeds-based startups: 1,203-Jaggery-based startups: 450-Spice-based startups: 240-Coffee-based startups: 11*Source: KAPPEC*Figures for Karnataka
