Banks and non-bank finance companies (NBFCs) with exposure to tariff-affected sectors are likely to see a revival in lending activity following the reduction in US tariffs from 25% to 18%, though lenders remain cautious as they await the final contours of the trade agreement. When the US tariff hike was announced in July, there were concerns that export-driven MSMEs — especially in textiles, gems and jewellery — would face pressure, hurting growth and asset quality. However, the sector had export orders till January, which provided a cushion through Q3, and domestic support measures further limited the impact. The fear was of sharper stress in Q4 and early Q1, but that risk has now eased, analysts said.