The Commerce Ministry is rolling out a comprehensive set of short, medium, and long-term measures to support exporters following the steep 50% tariffs imposed by the United States on Indian-origin products. The move is expected to impact nearly USD 49 billion worth of exports, accounting for over 55% of India’s shipments to the US.
Officials said the immediate measures aim to ease liquidity, prevent insolvencies, provide greater flexibility for units in Special Economic Zones (SEZs), and promote targeted import substitution. SEZ units, which exported USD 176.6 billion in 2024-25, have requested permission to sell to the domestic market on a duty-foregone basis, instead of paying existing duties.
To further assist MSMEs, the government is considering an “inventory model” for e-commerce exports. Under this, third-party entities would manage compliance and logistics, allowing exporters to focus on quality and branding. This may require amendments to FDI rules, as 100% foreign direct investment is currently allowed only in the marketplace model of e-commerce.
Medium-term measures will focus on leveraging India’s free trade agreements (FTAs), strengthening GST reforms, and intensifying buyer-seller outreach. Exporter delegations are planned to key markets, including Australia for apparel, the UAE for gems, and the UK for leather. India has FTAs with over a dozen countries and regions, including Australia, Japan, Korea, the UAE, and the ASEAN bloc.
In the long term, the government aims to build a resilient and diversified export base, underpinned by SEZ reforms, the Export Promotion Mission, and supply chain resilience initiatives. Officials highlighted that the phased export diversification framework will target critical HS codes and clusters, scaling up exports to traditional markets such as the EU, UK, UAE, Japan, Canada, and Australia, while also exploring untapped markets in Latin America, Africa, Eastern Europe, and East Asia.
“India is proactively responding with a timely, well-calibrated, and comprehensive strategy to safeguard our exporters and strengthen long-term global competitiveness,” said a senior Commerce Ministry official.
The US tariffs are expected to create significant challenges for exporters, including delayed payments, stretched receivable cycles, and order cancellations, particularly in sectors highly dependent on the US market. For instance, 60% of carpets, 50% of made-ups, 40% of apparel, and 30% of gems and jewellery exports are destined for the US.
