New Delhi: The Centre is working on a multi-pronged strategy to soften the impact of the 50% tariff that the US will impose on Indian goods from Wednesday, with $48.2 billion of its merchandise exports to that country set to face the punitive levy.
Of particular concern are labour-intensive sectors, as exports of textiles, shrimp, leather and gems and jewellery, among others, are expected to be the worst hit. Pharmaceuticals, electronics and petroleum products continue to be exempt from the tariff.
India exported goods worth $86 billion in FY25 to the US.
Exporters said textiles and apparel manufacturers in Tiruppur, Noida and Surat have halted production as they are losing ground to lower-cost rivals from Vietnam and Bangladesh.
In the seafood sector, especially shrimp, the tariff increases risk of stockpile losses, disrupted supply chains and farmer distress, as the US market absorbs nearly 40% of Indian seafood exports.
The tariffs are scheduled to come into force 9.30 Wednesday morning.
Shielding Exporters
“The duties…are effective with respect to products of India that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am Eastern Daylight Time on August 27,” the US Department of Homeland Security said in a draft order.
Meetings at the highest levels are ongoing to assess the situation, though officials ruled out any retaliation. “Deliberations in the government have been ongoing and meetings with the industry are also taking place,” said an official.
“The Export Promotion Mission and other proposals such as SEZ amendments are being considered,” said another official.
At the ET World Leaders Forum last week, commerce and industry minister Piyush Goyal said India’s relationship with the US is “very consequential,” but only national interest drives New Delhi in making a deal. He said India doesn’t hyphenate trade and geopolitics.
“We are looking at a GST revamp. We'll see how we can support many of these labour-intensive sectors, like food proces-sing, textile, through the GST framework to give a boost to domestic demand,” Goyal had said. “Our ministry and different line ministries are already looking at complementarity of our strength areas with other economies, so we can look at expanding trade with other countries. There are different ways in which we can ameliorate this current situation, until we are able to come to a settlement.”
India and the US are negotiating a bilateral trade agreement (BTA). American negotiators have postponed their India visit that was scheduled for August 25.
The US imposed a reciprocal tariff of 25% on certain goods imported from India from August 7. In addition, an ad valorem duty of 25% kicks in from Wednesday as penalty for its Russia oil purchases from Russia.
To shield exporters from the impact, the commerce and industry ministry is working on a Rs 25,000-crore Export Promotion Mission comprising several elements — trade finance, non-trade finance dealing with regulation, standards and market access, better brand recall for Brand India, ecommerce hubs and warehousing, and trade facilitation.
Of particular concern are labour-intensive sectors, as exports of textiles, shrimp, leather and gems and jewellery, among others, are expected to be the worst hit. Pharmaceuticals, electronics and petroleum products continue to be exempt from the tariff.
India exported goods worth $86 billion in FY25 to the US.
Exporters said textiles and apparel manufacturers in Tiruppur, Noida and Surat have halted production as they are losing ground to lower-cost rivals from Vietnam and Bangladesh.
In the seafood sector, especially shrimp, the tariff increases risk of stockpile losses, disrupted supply chains and farmer distress, as the US market absorbs nearly 40% of Indian seafood exports.
The tariffs are scheduled to come into force 9.30 Wednesday morning.
Shielding Exporters
“The duties…are effective with respect to products of India that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am Eastern Daylight Time on August 27,” the US Department of Homeland Security said in a draft order.
Meetings at the highest levels are ongoing to assess the situation, though officials ruled out any retaliation. “Deliberations in the government have been ongoing and meetings with the industry are also taking place,” said an official.
“The Export Promotion Mission and other proposals such as SEZ amendments are being considered,” said another official.
At the ET World Leaders Forum last week, commerce and industry minister Piyush Goyal said India’s relationship with the US is “very consequential,” but only national interest drives New Delhi in making a deal. He said India doesn’t hyphenate trade and geopolitics.
“We are looking at a GST revamp. We'll see how we can support many of these labour-intensive sectors, like food proces-sing, textile, through the GST framework to give a boost to domestic demand,” Goyal had said. “Our ministry and different line ministries are already looking at complementarity of our strength areas with other economies, so we can look at expanding trade with other countries. There are different ways in which we can ameliorate this current situation, until we are able to come to a settlement.”
India and the US are negotiating a bilateral trade agreement (BTA). American negotiators have postponed their India visit that was scheduled for August 25.
The US imposed a reciprocal tariff of 25% on certain goods imported from India from August 7. In addition, an ad valorem duty of 25% kicks in from Wednesday as penalty for its Russia oil purchases from Russia.
To shield exporters from the impact, the commerce and industry ministry is working on a Rs 25,000-crore Export Promotion Mission comprising several elements — trade finance, non-trade finance dealing with regulation, standards and market access, better brand recall for Brand India, ecommerce hubs and warehousing, and trade facilitation.
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