Online Reporter
India’s cabinet will consider proposals for a broad support package for exporters hit by the US tariffs, people familiar with the matter said, as the South Asian nation braces for an uncertain future with its largest export destination.
The Ministry of Commerce and Industry has proposed measures to ease liquidity for exporters through collateral-free loans and subsidised interest rates, according to the people, who asked not to be identified as the information isn’t public.
The cabinet was likely to take up the plan at its meeting on Wednesday or in the coming days, the people said.
The relief measures are expected to be funded with the 22,5 billion rupees (US$255 million) the government had set aside for export promotion in the federal budget in February, aimed at cushioning the impact of Trump’s tariff threats, they said.
At the time, India-US ties were still warm and New Delhi expected to escape relatively unscathed. But relations have deteriorated sharply in recent months, with the White House imposing 50 percent tariffs in August to punish India for its trade barriers and oil purchases from Russia.
The tariffs are the highest in Asia, making Indian goods uncompetitive compared with manufacturing rivals like Vietnam and Bangladesh. The US is India’s biggest export market, and the levies are expected to hurt labour-intensive businesses like textiles and jewellery the most.
Still, signs of a possible thaw have emerged, with leaders from both nations pledging in recent hours to resume trade talks. There have been discussions to increase the amount allocated in the federal budget. — Bloomberg
