A high-level meeting will be held by the Prime Minister’s Office on August 26 to assess the situation faced by Indian exporters following a sharp hike in US tariffs, according to media reports. The meeting is expected to be chaired by the Principal Secretary to the Prime Minister.
Starting Wednesday, Indian exports to the US will face new trade barriers following Washington’s move to raise tariffs to 50 per cent. That is double the existing rate.
According to reports, the move is expected to weigh heavily on exporters, driving up costs and tightening already thin profit margins.
Understandably, the Ministry of Commerce and Industry has been having high-level discussions with exporters and export promotion councils to gauge the impact of the earlier 25% tariff.
Reports have emerged that several organisations have already flagged a noticeable decline in their global competitiveness. There is reportedly a significant squeeze on profit margins due to the existing duty.
According to officials, the government is now considering focused support for vulnerable sectors instead of rolling out sweeping, economy-wide relief measures.
Exporters have sought support through an Emergency Credit Line Guarantee Scheme (ECLGS), which would offer collateral-free working capital backed by government guarantees. However, it’s widely held that focused interventions at the sector level may yield more effective outcomes.
Officials who didn’t want to be named have revealed that micro-firms had conveyed a preference for credit lines with collateral support, specific to their industries. In addition, the idea of cluster-based working capital funds is actively being considered to improve liquidity conditions.
Ensuring support for export-oriented units and small and medium enterprises (SMEs) remains a priority for the government, officials told a section of the media, citing their particular vulnerability to global economic disruptions.
Tomorrow’s meeting is expected to finalise India’s policy response, as exporters brace for the impact of the increased US tariffs.
The government is taking these steps amid mounting concerns that the 50 per cent US duty could further erode margins, disrupt supply chains, and diminish competitiveness in sectors such as textiles, leather, engineering goods, and specialty chemicals.
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