India approves $5.1b support package for exporters hit by US Tariffs
India’s cabinet on Wednesday approved a ₹450.6 billion ($5.1 billion) package to support exporters affected by recent US tariff hikes, Information and Broadcasting Minister Ashwini Vaishnaw said in New Delhi.
The plan includes ₹200 billion in credit guarantees for bank loans and ₹250.6 billion over six years for affordable trade finance, logistics improvements, and market expansion under a new export promotion initiative.
Vaishnaw said the government aims to help small and medium exporters maintain competitiveness and explore new markets following a sharp rise in US duties on key Indian products. The credit guarantee scheme, which will run until March 2026, will cover collateral-free loans of up to ₹500 million for exporters.
The United States recently imposed tariffs of up to 50% on Indian goods such as garments, jewellery, leather, chemicals, and seafood. The new duties include a 25% levy linked to India’s continued imports of Russian oil.
Exporters said labour-intensive sectors like textiles, jewellery, and seafood — which operate on profit margins of only 3–5% — have been hit the hardest, resulting in job losses in industrial hubs in Tamil Nadu, Gujarat, and Maharashtra.
According to the Federation of Indian Export Organisations (FIEO), about 55% of India’s exports to the US, worth roughly $48 billion, are now at a cost disadvantage compared to goods from Vietnam, China, and Bangladesh. India’s overall exports to the US, its largest trading partner, fell nearly 12% year-on-year in September to $5.43 billion after the new tariffs came into effect in late August. Engineering goods exports dropped around 10% in the same period.
Vaishnaw said the financial package would help safeguard jobs, improve liquidity for exporters, and strengthen India’s position in global trade.
On Monday, US President Donald Trump said Washington was close to a deal with India to expand economic and security cooperation, raising hopes in New Delhi that punitive tariffs could be reduced in the near future.
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