To Cushion Against US Tariffs, India Plans Rs 22 Billion Relief Package For Exporters Ahead Of Trump-Modi Talks

Amid escalating trade tensions with Washington, New Delhi is weighing a substantial relief package to cushion exporters against newly imposed American tariffs.

According to a Bloomberg report, the Commerce and Industry Ministry has outlined proposals that include collateral-free credit and interest subsidies. People familiar with the discussions said the Cabinet could consider the plan as early as this week.

The financial aid is expected to draw on about Rs 22.5 billion ($255 million) that was set aside in the Union Budget in February for export promotion. At that time, ties with Washington were relatively steady, but the situation shifted dramatically when the Trump administration announced 50 per cent tariffs on Indian goods in August.

The move, the steepest in Asia, poses a significant threat to India’s foothold in its largest export market. With textiles, jewellery, and engineering products among the worst-hit, exporters warn of steep losses.

Pankaj Chadha, head of the Engineering Export Promotion Council, told Bloomberg that shipments to the US could lose nearly a third of their value. Industry groups are pressing the government to shoulder at least half of the impact.

Exporters are also preparing to approach the Reserve Bank of India for temporary relief on foreign exchange rules. Their demand: allow proceeds from US trade to be converted at a rate roughly 15 per cent below the prevailing rupee value to soften the tariff blow.

Beyond immediate assistance, officials are exploring a longer-term support framework. According to earlier PTI reports, the government may commit nearly Rs 250 billion over six years to sustain exporters through subsidies, financial backing, and marketing initiatives in new markets.

Sectors that are heavily dependent on cheap labour are seen as most vulnerable, particularly as competitors such as Vietnam and Bangladesh step in to fill demand in the US.

Despite the friction, both Prime Minister Narendra Modi and President Donald Trump have indicated openness to resuming dialogue, though no timeline has been set.