The Indian government is actively working on a comprehensive relief package to bolster exporters grappling with the steep 50 percent tariffs imposed by the United States. Finance Minister Nirmala Sitharaman highlighted the government’s proactive multi-departmental engagement aimed at assessing and mitigating the adverse impact on Indian shipments to the US, a crucial trading partner. This detailed newsletter unpacks the key features, industry-wise implications, and strategic outlook surrounding the impending support measures.
Understanding The Context: US Tariffs Hit Indian Exports Hard
Since August 7, 2025, Indian exporters have faced punitive US tariffs typically pegged initially at 25 percent and rising to 50 percent by August 27 on several key sectors
The tariffs target goods ranging from textiles, apparel, gems and jewellery, leather products, footwear to chemicals and electrical machinery
The increase is partly in response to India’s continued imports of Russian crude oil, which the US penalizes alongside longstanding tariff and trade barrier disputes
The hike has reportedly jeopardized over $48 billion worth of merchandise exports, severely impacting price competitiveness globally
Key Highlights Of The Government's Planned Support
The government is liaising with various ministries and export sectors to ‘handhold’ and provide tailored assistance to those most affected
Discussions include potential incremental credit guarantees, easing loan repayment burdens for exporters facing financial stress
Renewed focus on helping labor-intensive sectors like textiles, shrimp exports, and gems, which operate on thin margins and are bearing the brunt of tariffs
An assessment mechanism involving continuous feedback from industry stakeholders to calibrate support measures effectively
The package is expected to be finalized after cabinet approval, with announcements anticipated soon
Sectoral Impact And Industry Voices
Labour-intensive sectors such as Tiruppur’s textile manufacturing hub have already seen halts in production amid collapsing margins
Jewellery manufacturing and seafood exports, particularly shrimp, are also grappling with declining cost competitiveness, leading to workforce layoffs in key industrial centers
Exporters warn of the risk of losing market share to countries like Vietnam, Bangladesh, and China, which remain untariffed
Industry bodies like the Federation of Indian Export Organisations (FIEO) emphasize the need for swift government intervention to stabilize export revenues and employment
Strategic Government Initiatives Beyond Immediate Relief
The Finance Ministry allocated ₹2,250 crore in the 2025-26 Budget towards Export Promotion Mission initiatives intended to boost MSMEs and value-add exports, though many schemes await rollout
Negotiations for a bilateral trade agreement (BTA) with the US continue, with hopes of tariff rollbacks or easing barriers in future deals, though deadlocks remain on sensitive sectors like agriculture and dairy
Policy measures may also include boosting alternate markets, improving logistics efficiency, and incentivizing export diversification
Looking Ahead: Challenges And Opportunities
Exporters will need to strategically adjust to the ‘new normal’ of higher tariffs, exploring cost reduction, improving product differentiation, and enhancing quality standards
The government’s support package aims to provide critical breathing space to exporters during this turbulent phase while diplomatic and trade dialogues work toward long-term solutions
Continuous monitoring of currency fluctuations and cost structures will be paramount in maintaining export viability
Final Thought
With the government’s upcoming package poised to aid exporters hit hardest by US tariffs, Indian industries await concrete relief measures that balance immediate financial support with strategic reforms. The evolving trade dynamics underline the importance of resilience, innovation, and proactive policy actions to safeguard India’s export ecosystem and its millions of livelihoods dependent on it.
Sources: The Hans India, Economic Times, NDTV Profit, PTI News, Moneycontrol
