Government plans Rs. 25,000 crore (US$ 2.85 billion) export support mission to counter US tariff impact
- IBEF
- August 18, 2025
Amidst the continued uncertainty from higher US tariffs, India's commerce and industry ministry has solidified support schemes totalling approximately Rs. 25,000 crore (US$ 2.85 billion) under the Export Promotion Mission for six years. These schemes have been designed to be compliant with World Trade Organization (WTO) regulations and will focus on trade finance and improving market access for exporters. The government views this mission as a long-term strategy that addresses challenges beyond just tariffs and trade wars, with one official noting that the goal is to look at the long-term situation. The strategy includes promoting exports, diversifying both markets and the export basket to reduce future risks, and encouraging exporters to improve the "exportability" of Indian products. The proposal for these schemes has been submitted to the finance ministry for its review and approval, and after receiving a nod from the Union Cabinet, the schemes will be launched. These efforts come as exporters, particularly in sectors like gems and jewellery, textiles, and marine products such as shrimp, are preparing to face a 50% tariff on goods sent to the US.
The new schemes have been developed with a special focus on small exporters. They aim to help these exporters by offering collateral-free loans, supporting alternative financial instruments through cross-border factoring, and providing assistance for high-risk markets. A direct subsidy-based approach is considered unlikely because it is difficult to implement, presents concerns of moral hazard, and carries the risk of violating WTO rules. It is also challenging to accurately measure the impact of such subsidies on exporters and justify their allocation. This new package of schemes under the Export Promotion Mission follows the Rs. 2,250 crore (US$ 256.85 million) mission announced in the 2025-26 Union Budget, which has not yet been rolled out.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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