It's about half a foot high, it was grown from a cutting of a big tree (around a year old). Recently it's been dropping leaves like hot potatoes, and I know it's not supposed to be doing that. Even the tiny ones are falling. I thought it was a water problem (soil felt dry), so I gave it maybe a cup of water two days ago and since then it's dropped about four more leaves. It doesn't even have that many in the first place, so I'm afraid soon it'll be bare. HELP
It's likely getting too much or too little water. The soil needs to be moist, but let the soil start to dry out between waterings. Also make sure it is getting as much sun as possible. Here are more care tips:
https://www.gardeningknowhow.com/edible/fruits/lime/care-of-your-kaffir-lime-tree.htm
Lime plant brought indoor November 1st. Water once a week, soil kept moist using moisture meter. When brought indoor it has full foliage. Some leaves turned brown from the edge inward and started dropping the top part of the leaf, then the second part of the leaf dropped a few days later. At the same time, new sprouts came out but the new sprouts started to brown and the new leaves are very thin and light yellowish green. The older leaves all dropped of. Now, the new leaves from the new sprouts are starting to drop too. The bare branches are browning and dried out from the top. The lime is indoor with 10 to 12 hrs of grow light full spectrum. There is a couple new budding shoots at the root but it turned black.
Plants have a tough time acclimating to the indoors after spending time outdoors in bright light and higher humidity. The Kaffir lime needs full sun, so, even though you use a grow light, it should be close to a sunny window. Also, it probably needs more humidity. You can mist it or set it on a pebble tray. These lime trees do like moist soil, but when indoors, it is easy to overwater. Let it begin to dry between waterings. It may not need water every week.
The black budding shoots is concerning. Root rot may have set in. I would repot the plant in fresh soil and a clean container with drainage holes. These articles should help:
https://www.gardeningknowhow.com/edible/fruits/lime/care-of-your-kaffir-lime-tree.htm
https://www.gardeningknowhow.com/houseplants/hpgen/what-is-a-pebble-tray.htm
We do have a possum that could be the problem is there a fix to save the tree.
It does look more like animal damage than diseased or natural peeling bark. Possums will eat tree bark in winter and it's very common in Australia. The only thing you can do is prune out dead branches and try to keep the tree as healthy as possible with correct watering, fertilizing and mulching. Prior to winter, you can net the tree to protect it. Since many of branches pictured are chewed all the way around, it basically girdles the tree, preventing nutrient uptake, killing the branch or tree if the trunk is affected.
https://www.gardeningknowhow.com/edible/fruits/lime/care-of-your-kaffir-lime-tree.htm
https://www.gardeningknowhow.com/ornamental/trees/tgen/peeling-bark-on-trees.htm
https://www.gardeningknowhow.com/edible/fruits/citrus/managing-citrus-exocortis-symptoms.htm
https://www.gardeningknowhow.com/plant-problems/pests/animals/protecting-trees-from-rodents.htm
https://www.gardeningknowhow.com/plant-problems/pests/animals/possum-control.htm
https://www.gardeningknowhow.com/plant-problems/pests/animals/possum-control.htm
https://www.gardeningknowhow.com/edible/fruits/citrus/citrus-psorosis-disease.htm