Govt may focus on extending support measures to sectors hit hard by US tariffs

Time of India

3 days ago

The government may prioritise support measures for sectors, like textiles and chemicals, which would be severely impacted by the
US tariffs
, under the
export promotion mission
, industry sources said on Thursday.
The issues were discussed in the commerce ministry's consultations with exporters from the textiles and chemicals sectors to assess the impact and explore possible support measures, they added.
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They said that the ministry is working on the export promotion mission, announced in the Budget.
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The mission is expected to feature components, including easy credit schemes for MSMEs, e-commerce exporters, facilitation of overseas warehousing, and global branding initiatives to tap emerging export opportunities. The government on February 1 announced the setting up of the mission with an outlay of Rs 2,250 crore.
"The government is looking at extending support measures under this mission to sectors which would be badly hit by the US tariffs," they said.
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India's textiles exports to the US stood at about USD 11 billion. The sector accounts for 9 per cent of the US's total textiles imports.
Similarly, the country's chemical exports to the US stood at about USD 6 billion.
US President Donald Trump on Wednesday slapped an additional 25 per cent tariff, raising the total duties to 50 per cent on goods coming from India, as a penalty for New Delhi's continued purchase of Russian oil. The 50 per cent duty will come into effect from August 27.
In 2024-25, the bilateral trade between India and the US stood at USD 131.8 billion (USD 86.5 billion exports and USD 45.3 billion imports).
The sectors, which would bear the brunt of 50 per cent duty, include textiles/ clothing, gems and jewellery, shrimp, leather and footwear, chemicals, and electrical and mechanical machinery.
In the meeting, exporters urged the ministry to extend fiscal incentives, such as interest subsidy and extension of RoDTEP scheme (Remission of Duties and Taxes on Exported Products), RoSCTL (Rebate of State and Central Taxes and Levies), timely payment of dues, and a direct shipping line to the US.
A representation has been sent to the GK Pillai committee on RoDTEP issues.
They also requested measures to cut compliance burden, simplification of advance authorisation norms, and a reduction in port charges.
The industry sources said exporters have started exploring opportunities in new geographies.
"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," they said, adding that high tariffs will help exporters to look at domestic markets, and this will in turn help in cutting down India's import bill also.