NEW DELHI (Reuters) – India is considering measures such as extending interest subsidies on bank loans and offering incentives to help exporters to diversify amid rising global uncertainty after the U.S. tariff hikes, two government sources said.
A 26% tariff on Indian exports – alongside even steeper duties on some other countries like China – has escalated trade tensions, and raised concerns among Indian exporters of gems and jewellery, chemicals, pharmaceutical and engineering goods.
The proposed support measures could be discussed at a meeting late on Wednesday, convened by Commerce and Industry Minister Piyush Goyal, with nearly 30 export promotion councils representing millions of exporters, said one of the government sources with the knowledge of the matter.
The minister and officials are expected to examine what steps could be taken within financial constraints to support vulnerable sectors, particularly small exporters in textiles, gems and jewellery, and engineering goods, the source added.
The Reserve Bank of India cut its interest rate on Wednesday for a second consecutive time while signalling scope for further easing – a move that could provide some relief to exporters.
Other proposals under consideration include extending government-backed insurance on exporters’ bank loans and marketing incentives to boost shipments to alternative markets in Latin America and Africa, a second government official said.
Officials from the finance and commerce ministries, along with the prime minister’s office, are working on the plans in consultation with other departments, the sources said.
The officials spoke on condition of anonymity as they were not authorised to speak to the media.
The commerce ministry did not respond immediately to email request for comment.
S.C. Ralhan, president of the Federation of Indian Export Organisations (FIEO), who will attend Goyal’s meeting, said the government should offer at least 5% support through incentives and extend the interest subvention scheme, which expired on March 31, to help offset losses from the U.S. tariff hikes.
Exporters have also urged the government to defer a proposed 12% safeguard duty on some steel products that aims to curb cheaper Chinese imports, warning it would hurt their competitiveness amid rising domestic prices, he said.
(Reporting by Manoj Kumar; Editing by Gareth Jones)
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