India is preparing a relief package to support exporters struggling due to high US tariffs, FM Nirmala Sitharaman said on Friday. The US, under President Donald Trump, recently imposed extra duties on Indian goods. Tariffs on products like garments, jewellery, footwear, and chemicals have gone up to 50%.
“Government will come out with something to handhold those who have been hit by 50% tariffs,” Sitharaman told CNBC TV18, without giving more details. The package aims to give quick help to industries facing financial problems and keep them running despite rising trade barriers with the US.
Relief for Exporters
N. Sitharaman said India cannot leave exporters “high and dry.” She added, “Industries have been speaking about tariffs and their impact. The government has designed something, and we will come up with the same for companies hit by 50% tariffs.”
The plan still needs Cabinet approval, officials are working on both short-term and long-term ways to reduce the burden on exporters.
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Liquidity Challenges & Government Support
Reports say exporters may face delayed payments, longer receivable periods, and even cancelled orders because of the tariff hike. An official told the Hindustan Times, “To prevent working capital stress and protect employment, the government is considering several steps to ease liquidity, prevent insolvencies, and allow exporters to sustain operations until new markets are tapped.”
The government is also looking at relief measures like those during COVID-19, along with plans to diversify markets and improve supply chains for the future.
Impact on India-US Trade
These tariffs are among the toughest under Donald Trump’s administration, and about 55% of Indian exports to the US, worth $48 billion, are now at a cost disadvantage compared to competitors from Vietnam, China, and Bangladesh.
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The high duties have strained relations between India and the US, countries that were once strong trade partners. Protecting India’s export industries has become a priority.
Turning Crisis Into Opportunity
In addition to creating a barrier, the taxes might drive Indian exporters to explore markets beyond the US. Businesses may choose to strengthen their supply chains, develop new technologies, and diversify their markets with government support and liquidity help.
This deal might affect India’s export strategy and reduce its reliance on any one country, so it’s more than just a short-term fix.
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