Government taking steps to ‘mitigate impact’ of steep US tariffs on exports

New Delhi: The government on Tuesday said it is taking steps, such as announcing an export promotion mission, to mitigate the impact of the steep US tariffs on domestic goods.

In a written reply to the Lok Sabha, Minister of State for Commerce and Industry Jitin Prasada said it is expected that these measures will enhance diversification and resilience in India’s trade relationships.

“The government continues to work to mitigate the impact of the US tariff measures on Indian exports through a comprehensive multi-pronged strategy encompassing intensive engagement with the US government for a mutually beneficial India-US Bilateral Trade Agreement,” he said.

He added that immediate relief has been given through trade relief measures of the RBI and announcement of the Credit Guarantee Scheme for Exporters, enhancement of domestic demand through GST reforms, and negotiating free trade agreements (FTAs) with new countries.

On July 31 this year, the US issued an executive order with reciprocal tariff rates for its trading partners. The order notified country-specific additional ad-valorem duty rates for certain American trading partners, including those which have agreed to, or are in the process of concluding trade agreements with them.

These tariffs are in the range of 15-41 per cent, with the tariff on India being 25 per cent. It came into effect on August 7. The US, on August 6, imposed an additional tariff of 25 per cent on India, citing its purchase of Russian oil. The tariffs took effect on August 27.

These tariffs apply to products in sectors such as textiles, handicrafts, leather, certain agricultural items, marine products and engineering goods, the minister informed.

About the export promotion mission, Prasada said the mission will provide a comprehensive, flexible, and digitally driven framework for export promotion, with a total outlay of Rs 25,060 crore for 2025-26 to 2030-31.

The Reserve Bank of India (RBI) has also initiated trade relief measures for eligible affected exporters, including provision for debt repayment moratorium and extension of tenor for export credit, he added.

With an aim for promotion of export diversification, India has signed 15 Free Trade Agreements (FTAs) and six Preferential Trade Agreements (PTAs) with its trading partners.

“Government is working with all stakeholders to enable our exporters to better utilize the benefits of India’s FTAs with major markets such as Japan, Korea, UAE and effectively utilize the opportunities that have been created with the recently concluded FTAs,” he said.

The government is also engaged in negotiations for early conclusion of mutually beneficial FTAs with the EU, Peru, Chile, New Zealand, and Oman.