India Announces Export Support Amid Rising US Tariffs

The Indian government has outlined a detailed strategy to mitigate the impact of heightened tariffs imposed by the United States on Indian goods. This announcement was made in light of a significant decline in exports, as recent data shows a sharp drop in various sectors due to increased duties.

Overview of the Government's Strategy

In response to escalating tariffs, which have risen from 25% to 50% on numerous Indian products, the Centre has initiated a multi-faceted approach aimed at enhancing trade competitiveness. This includes trade negotiations, export promotion initiatives, and financial support mechanisms, as per a statement from the Ministry of Commerce and Industry.

To assist exporters particularly affected by these tariffs, the government has launched a new Export Promotion Mission with a substantial budget of ₹25,060 crore (£2.5 billion) earmarked for the fiscal years 2025-26 to 2030-31. This mission features two primary components: the NIRYAT PROTSAHAN scheme, which provides affordable trade finance for micro, small, and medium enterprises (MSMEs), and the NIRYAT DISHA initiative, which focuses on non-financial support such as quality compliance, branding, and logistics.

Additionally, a Credit Guarantee Scheme has been introduced, offering ₹20,000 crore (£2 billion) in collateral-free loans to further bolster liquidity and competitiveness among exporters. Measures by the Reserve Bank of India (RBI) also include a moratorium on debt repayments and extended tenors for export credit to ease the financial burden on affected businesses.

Impact of US Tariffs on Exports

Recent reports indicate that India's merchandise exports have seen a downturn, with exports declining by 28.5% over five months due to the US tariffs. This has particularly affected sectors such as textiles, leather, and engineering goods. The Ministry of Commerce & Industry has noted that the overall value of exports fell from $8.83 billion in May to $6.31 billion in October 2025.

Experts have expressed concern that while electronics exports have shown growth, this sector alone cannot compensate for the losses in other crucial areas. For instance, although electronics exports surged by 19% in October, major sectors like engineering goods, gems and jewellery, and textiles reported significant declines.

Challenges from Chinese Competition

In addition to US tariffs, Indian exporters are facing intense competition from Chinese products, which are often priced lower due to aggressive pricing strategies. This has raised alarms among analysts, who believe that without timely intervention, India risks losing its competitive edge in several key markets.

Trade experts suggest that the Indian government must enhance its engagement with the United States to negotiate a more favourable trade environment. Recent statistics reveal that sectors such as gems and jewellery have been particularly hard-hit, with exports dropping by 29.5% year-on-year.

Call for Policy Interventions

Analysts have urged the government to implement targeted policies addressing the specific needs of sectors most affected by the tariff increases. The Global Trade Research Initiative has called for an expedited rollout of the announced export promotion mission and suggested that India should push for the removal of the additional 25% tariff imposed by the United States.

Conclusion

The Indian government’s comprehensive strategy aims to reinforce the resilience of its exporters amid challenging global trade dynamics. While the focus on electronics presents a temporary lifeline, sustained efforts will be essential to protect traditional export sectors and ensure long-term competitiveness against both US tariffs and Chinese market strategies. As the situation evolves, the government faces the dual challenge of navigating international trade relations while supporting domestic industries in distress.