New Delhi: With the long-debated rationalisation of Goods and Services Tax (GST) finally settled, the Centre has shifted its focus toward exporters struggling under the weight of steep US tariffs. Senior officials indicated on Friday that a special relief package is in the works to cushion sectors that have been hit hardest by the trade measures imposed by Washington.
The urgency stems from a recent move by US President Donald Trump, who announced a 50 per cent tariff on Indian goods last month. Of this, 25 per cent was imposed as a direct penalty for New Delhi’s continued purchase of Russian oil, a decision that the Indian government has described as “unfair, unjustified, and unreasonable.” The shockwave from these tariffs has left exporters grappling with shrinking margins, falling competitiveness, and mounting pressure on jobs.
Sectors such as textiles, apparel, gems, and jewellery have emerged as the most vulnerable, as they rely heavily on the American market for sales. Industry voices say buyers in the US are now turning to alternative suppliers in countries with friendlier tariff regimes. But the stress is not confined to these high-profile industries. Exporters of leather and footwear, chemicals, engineering goods, agricultural produce, and marine products are also facing increasing difficulty in holding their ground in global markets.
To counter this, government insiders suggest that the relief package will be modeled along the lines of the COVID-19-era stimulus extended to Micro, Small and Medium Enterprises (MSMEs). This could mean steps to improve liquidity, easier access to working capital, and incentives to maintain jobs in export-linked sectors. A key objective is to ensure uninterrupted production while India simultaneously looks to diversify into new markets.
In tandem, the government is also moving to operationalise the Export Promotion Mission announced in the Union Budget earlier this year. This mission is intended to provide structural support for India’s trade expansion, build stronger global linkages, and soften the impact of market disruptions caused by unilateral tariff actions.
Despite the tariff headwinds, India’s exports to the United States have shown resilience so far. In the first four months of the current fiscal year, shipments rose 21.64 per cent to $33.53 billion, compared with $86.5 billion in the whole of 2024–25. Importantly, about half of India’s exports to the US remain outside the ambit of the new 50 per cent tariff, offering exporters some breathing room. Still, the pressure is undeniable, with the US accounting for nearly one-fifth of India’s total exports last year.
The Centre’s next moves will be closely watched by industry leaders and global trade analysts alike. As India navigates the dual challenge of protecting its exporters and asserting its stance on energy security, the balance between diplomacy, trade resilience, and domestic economic support will be critical in the months ahead.