The Indian government is drafting a relief package to cushion exporters hit by the United States’ recent tariff hike, which raised duties on Indian goods to as high as 50 percent. Finance Minister Nirmala Sitharaman confirmed that measures are being designed to support industries struggling to stay competitive in the wake of the steep increase.
The tariff escalation, which also includes an additional 25 percent levy linked to India’s purchase of Russian oil, has severely impacted several sectors. Exporters in textiles, gems and jewelry, footwear, seafood, and chemicals—many of which operate on narrow profit margins—are already reporting production halts and potential layoffs. Industrial hubs such as Tiruppur, Noida, Surat, and Rampur have started to feel the strain, with order cancellations and job insecurity mounting.
The relief package is expected to provide short-term financial lifelines, including credit guarantees for loans overdue by up to 90 days, particularly targeting micro, small, and medium enterprises (MSMEs). These businesses often face working capital shortages, and the new tariffs have made their position more precarious.
Alongside immediate support, the government is also considering a broader strategy to safeguard exporters in the long term. Proposed measures include easing Special Economic Zone (SEZ) norms, strengthening domestic supply chains, encouraging market diversification, and pushing forward initiatives like e-commerce export hubs and the Export Promotion Mission.
Exporters have cautioned that more than half of India’s $48 billion in annual shipments to the U.S. could lose competitiveness compared to rivals in Vietnam, China, and Bangladesh. Early estimates suggest that the country could face export losses of up to $37 billion this fiscal year if the situation persists.
The proposed relief package is seen as a critical step to protect livelihoods, stabilize the export ecosystem, and reduce reliance on a single major market amid growing global trade uncertainties.