Indian exporters and major industry associations met Reserve Bank of India (RBI) Governor Sanjay Malhotra seeking several relaxations to mitigate the adverse impact of the 50 per cent US Tariffs imposed by Donald Trump on a majority of Indian Products entering the US market.
Indian exporters and industry associations no doubt was impacted heavily after the US Tariffs and hence to mitigate the adverse impact on their respective sectors Indian exporters and industry associations approached the Reserve Bank of India. The agenda of the meeting was to push for easier loan repayment terms and a waiver of penal interest in a bid to ease financial stress.
Indian Exporters Seek Reform in Credit Repayments
During a two-hour meeting exporters demanded a 12-month break from credit repayments and a more relaxed NPA classification for export loans of up to 180 days. Further associations also want a sovereign guaranteed scheme that would help them explore and enter new markets with greater confidence.
How US Tariffs are Impacting Indian Exporters and Exports?
The trump administration has slapped a 25 per cent punitive tariff on India in addition to an existing 25 per cent base rate. The punitive tariff was slapped on India for buying Russian oil, which the US thinks is funding Moscow’s war in Ukraine. For the US, purchase of Russia oil by India is giving Moscow ‘the dollars it needs’.
The US is India’s largest export market; hence these tariffs are likely to hit labour-heavy industries such as textiles, footwear, and gems and jewellery the hardest.
RBI’s Response to Tariff’s and Exporters Demands
After the ‘Liberation Day’ tariff shock, the Reserve Bank of India trimmed the country’s GDP forecast by 20 basis points in April. Further, supporting the Indian economy the Reserve Bank of India also cut the repo rate by 100 bps and injected fresh liquidity into the system.