Commerce Ministry Plans Consultations with Exporters to Assess Damage
In response to the 26 percent reciprocal tariff imposed by the United States on Indian goods, the Indian government is considering introducing fresh incentives to cushion the blow for its exporters. The Ministry of Commerce is expected to hold consultations with export-oriented businesses this week to evaluate the severity of the impact across sectors and gather feedback on whether existing schemes suffice or if additional policy support is needed.
A senior government official indicated that the Department of Commerce is already monitoring the situation closely and is open to enhancing support through either new schemes or augmenting existing ones. The outcome of the meeting with exporters will be critical in shaping this decision. If the need arises, the ministry may formally approach the Ministry of Finance to secure approval for fresh funding.
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Commerce Ministry to meet exporters this week for direct input on tariff impact
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Decision on fresh export incentives will follow stakeholder consultations
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Department of Commerce may seek Finance Ministry approval if additional funds are required
Trump’s Tariffs Prompt Broader Strategic and Fiscal Review
President Donald Trump’s move to impose steep reciprocal tariffs on over 60 trading partners has sparked a global reassessment of trade strategies. India, subjected to a 26 percent tariff, finds itself in a relatively better position compared to countries like China and Vietnam, which are now facing tariffs of 54 and 46 percent respectively. However, the impact on India’s export-dependent sectors such as textiles, electronics, gems, and jewellery remains substantial.
World Trade Organization Director-General Ngozi Okonjo-Iweala recently warned that such tariff escalations could trigger a 1 percent contraction in global merchandise trade volumes during 2025. A preliminary analysis by Emkay Global estimates that Indian exports to the US could decline by $30-33 billion, amounting to 0.8-0.9 percent of the country’s GDP, if global responses and cross-border adjustments are not factored in.
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WTO warns of 1% decline in global trade volumes in 2025 due to US tariffs
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India could suffer a $30-33 billion hit in exports to the US, per Emkay Global estimates
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Trade partners worldwide are reassessing supply chain dependencies and cost structures
Existing Incentives May Not Be Enough, Say Officials
Though India already has several incentive frameworks in place for its exporters—including the Remission of Duties and Taxes on Export Products (RoDTEP) scheme—officials acknowledge that these may need expansion to neutralize the new tariff burden imposed by the US. The Export Promotion Mission, funded under the Union Budget 2025-26 with ₹2,250 crore, is designed to support MSME exporters and improve competitiveness in global markets.
However, the scope and funding may fall short in the face of an aggressive tariff regime introduced by the United States. Senior officials noted that the government has already committed close to ₹40,000–₹60,000 crore under various existing schemes but remain open to reassessing budget allocations in response to evolving trade dynamics.
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RoDTEP and other export support programs already cover a wide array of products
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₹2,250 crore allocated in 2025-26 Budget for the Export Promotion Mission
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Total estimated value of support under all schemes ranges from ₹40,000 to ₹60,000 crore
Indian Exporters Struggle to Maintain Growth Trajectory
Despite supportive policies, the Indian export sector is under visible stress. As per data from the Ministry of Commerce, India’s merchandise exports for April–February of the previous fiscal year stood at $395.63 billion, virtually unchanged from $395.38 billion during the same period the year before. Imports, however, grew to $656.68 billion from $621.19 billion, widening the trade deficit and putting further pressure on India’s balance of payments.
Exporters across sectors, particularly those involved in textiles, gems and jewellery, and certain electronics components, have raised concerns over the viability of maintaining existing supply chains and price competitiveness in the US market. The upcoming consultation with the Ministry of Commerce will likely include sector-specific grievances and requests for relief, especially from micro, small, and medium enterprises (MSMEs) that are more vulnerable to external shocks.
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Merchandise exports remained flat year-on-year at around $395 billion
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Imports surged to $656.68 billion, widening India’s trade deficit
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Exporters warn of falling competitiveness in key US markets due to new duties
March Trade Data to Offer Crucial Clues for Policy Response
The Ministry of Commerce is scheduled to release India’s March trade data on April 15, which will offer the first full-month glimpse into the performance of Indian exports post-announcement of US tariff measures. Government sources suggest that this data will play an instrumental role in determining whether additional policy tools need to be deployed to sustain export momentum.
Given that the impact of US tariffs may manifest unevenly across sectors and regions, the Ministry is expected to conduct a detailed analysis of trade data, segregating performance trends by sector and country. This evaluation will help prioritize which industries may require targeted fiscal assistance or regulatory relief.
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March 2025 trade data will be released on April 15
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Sector-wise performance review will influence the scale and focus of new incentives
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MSMEs and labour-intensive sectors may be prioritized in support measures