New Delhi: The government is working to plan out a roadmap of support measures that is set to cushion Indian exporters from the impact of steep US tariffs, said an official on Thursday, 28 August. The USA has imposed 50 percent duties, which includes an additional levy of 25 percent that the US has slapped on India courtesy of India buying discounted Russian crude oil and defence equipment. The US has alleged India is funding the Russia-Ukraine war by buying oil.
The tariffs particularly affect labour-intensive sectors such as machinery, shrimp, textiles, leather and footwear, and gems and jewellery, thereby affecting and making Indian exports less competitive as compared to the exports of tiger economies like Vietnam, Bangladesh, and Thailand.
Government measures for export promotion
In order to deal with the potential impacts of the tariffs, the government of the day has accelerated the rolling out of export promotion missions worth Rs 25000 crore over the period of six years, i.e., 2025-2031. The mission is set to be implemented through two sub-schemes, viz., Niryat Protsahan, which has a corpus fund of Rs 10,000 crore, and Niryat Disha, which has a corpus fund of 14,500 crore.
“The government is trying to speed up the rollout of the export promotion mission and expediting the e-commerce export hub scheme,” the official said.
The key measures include an emergency credit line guarantee scheme for MSME exporters, a moratorium on export loans to ease liquidity pressures, and an extension of export realisation periods. Exporters are stressing for the resumption of interest subsidies, low-cost credit, and a moratorium on principal and interest payments for up to one year.
Government officials are acknowledging that the short pain will be there and this cannot be averted, however, this is a wake-up call for India Inc. to diversify its export basket (export diversification), explore new markets, and leverage the upcoming FTAs.
“We are considering their suggestions. We are trying something tangible with long-term benefits,” said the official.
India-US Trade
The exports to the US rose to $33.53 billion, up around 22 percent in the first four months of the current fiscal year, FY26. In FY25, Indian exports stood around $86 billion, which accounted for about 20 percent of India’s total $437 billion of Indian exports. The India-US bilateral trade reached around $132 billion in the last fiscal year of 2025, further solidifying US position as India’s largest trading partner since 2021.