The central government is planning a relief package to support exporters affected by US Tariffs. Trump tariffs on Indian goods have created chaos among the exporters across the nation. As per the report, the relief package could involve four schemes, most of them focused on credit and liquidity support. The focus behind the relief package is to ease the working capital stress, keeping jobs intact and giving exporters time to tap new markets. It is mainly focused on small firms in labour-intensive sectors, such as textiles, apparel, gems and jewellery, leather and footwear, engineering goods, and agri-marine exports.
The government plans to offer credit guarantees on loans overdue by up to 90 days for small businesses and exporters. Among the hardest-hit sectors after the Trump Tariffs are labour-intensive sectors such as textiles, jewellery and seafood, all operating on margins of just 3%-5%. Undoubtedly, the US Tariffs on Indian goods is a serious blow to ties between the two powerful democracies that had in recent decades become strategic partners. Nearly 55% of Indian exports to the U.S., worth about $48 billion, now face a cost disadvantage against rivals from Vietnam, China and Bangladesh.
Expected Relief Package
- One of the measures would be credit lines for exporters to continue daily operations, the sources added.
- Another important factor is to curtail job loss as majority of the workers in these industries are employed in small towns.
- Further, the government is expected to push ahead with its plan for the Export Promotion Mission, announced in the Union Budget 2025