Finance Minister Nirmala Sitharaman, on Friday, revealed that the Indian government is finalising a comprehensive relief package to assist exporters grappling with the impact of steep US tariffs. The announcement comes as Indian industries, particularly in labor-intensive sectors, face significant challenges due to a recent surge in duties imposed by the United States.
The US, under the Trump administration, introduced a 25% punitive tariff last month, citing India’s continued purchase of Russian crude oil. This has resulted in total tariffs as high as 50% on a range of Indian exports, including textiles, jewellery, footwear, and chemicals. These duties have disrupted India’s trade competitiveness, particularly against rivals like Vietnam and Bangladesh, and have led to order cancellations and job losses in key industrial hubs such as Tiruppur, Noida, and Surat.
“We cannot abandon our exporters in this challenging time,” Sitharaman stated in an interview with India Today. “A package with multiple components is being prepared to help them withstand this wave of tariffs.” While specific details of the relief measures remain undisclosed pending Cabinet approval, the government is exploring options such as credit guarantees for small businesses and exporters, liquidity support, and a moratorium on loans overdue by up to 90 days. Additionally, efforts are underway to diversify export markets and strengthen supply chain integration to mitigate long-term impacts.
The Federation of Indian Export Organisations (FIEO) has been vocal about the tariffs’ adverse effects, estimating that approximately 55% of India’s $48 billion in exports to the US are now at a cost disadvantage. Labor-intensive sectors like textiles and seafood, operating on thin profit margins of 3-5%, are particularly hard-hit, with shrimp exports projected to decline by 15-18% this financial year.
Sitharaman also reaffirmed India’s stance on its oil procurement strategy, stating, “Our decisions on oil imports are driven by what best suits our economic needs, and we will continue to make choices that prioritise India’s interests.” Despite strained trade relations, communication channels between India and the US remain open, with hopes of resuming bilateral trade talks soon.
The government is also considering long-term strategies, such as a proposed export promotion mission worth Rs 25,000 crore over six years and enhanced funding for global trade exhibitions. Industry leaders have urged the revival of schemes like the Interest Equalisation Scheme and the establishment of e-commerce export hubs to bolster India’s global trade presence.
