Support in sight: India plans cushion for US-hit sectors; new export mission to aid MSMEs, explore new markets
The government may prioritise targeted support for sectors such as textiles and chemicals, those expected to be severely affected by the new 50 per cent US tariffs, under its export promotion mission, industry sources said on Thursday.
As per the news agency PTI, the matter was taken up during consultations held by the commerce ministry with exporters from the textiles and chemicals sectors to evaluate the fallout of the US decision and explore support mechanisms.
Sources cited by PTI claimed that the Centre is working on the structure of the Rs 2,250 crore export promotion mission, which was announced in the Union Budget earlier this year. The plan is likely to include easy credit schemes for MSMEs, facilitation of warehousing overseas, e-commerce promotion, and global branding initiatives to help Indian exporters access new markets.
'The government is looking at extending support measures under this mission to sectors which would be badly hit by the US tariffs,' one source said, as quoted by PTI.
Textiles exports from India to the US are currently worth around $11 billion, accounting for 9 per cent of the US's total textiles imports. Similarly, chemical exports are pegged at about $6 billion.
US President Donald Trump on Wednesday signed an executive order imposing an additional 25 per cent tariff on Indian goods, effectively doubling the total duty to 50 per cent from August 27.
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The move was in response to India's continued purchases of discounted Russian oil, which surged following Western sanctions on Moscow after the Ukraine war.
At the meeting, exporters urged the commerce ministry to provide fiscal incentives, including interest subvention and an extension of schemes such as RoDTEP (Remission of Duties and Taxes on Exported Products) and RoSCTL (Rebate of State and Central Taxes and Levies).
They also sought timely release of dues, simplified advance authorisation norms, and lower port charges.
Exporters have also made a representation to the GK Pillai committee on RoDTEP-related concerns.
As per PTI, industry sources added that several exporters have begun looking at alternative markets. "The world trade is disrupted, and in this, there are possibilities of export diversification. Export promotion councils are working on this.
The commerce ministry is also analysing," one person said.
They added that high tariffs may push Indian manufacturers to explore domestic demand more seriously, thereby reducing imports and helping the country's trade balance.
The new tariffs come just weeks ahead of the sixth round of India-US trade negotiations, scheduled for August 25.
Washington is pressing India for duty concessions on industrial goods, dairy, wines, EVs, and genetically modified crops. India exported goods worth $86.5 billion to the US in 2024-25, with textiles, leather, chemicals, and machinery among the top categories.
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