Ahead of the Union Budget 2025-26, exporters on Thursday urged the finance ministry to approve a United States (US)-focused marketing scheme worth Rs 750 crore, which could generate additional exports of approximately $25 billion to the US over the next three years.
According to the Federation of Indian Export Organisations (FIEO), the US’s intention to impose higher tariffs on China presents a “significant opportunity” for Indian exports, particularly in sectors where China has been a dominant supplier.
These sectors include electronics and electrical equipment, footwear, textiles and garments, furniture and home decor, automotive components, toys, and chemicals. Of these, consumer electronics such as mobile phones, televisions, and electrical components are expected to see the largest gains, with potential additional exports of $10 billion, the apex export body said.
“To achieve this, we need to increase our presence in the US through participation in a large number of exhibitions, buyer-seller meets, and partnerships with major local retail associations. A marketing scheme with a corpus of Rs 250 crore per year (Rs 750 crore overall) for three years could be launched to achieve an additional $25 billion in exports by the end of three years,” FIEO President Ashwani Kumar said.
Recognising the importance of research and development (R&D) and product innovation to sustain exports, FIEO has also requested the government to provide a tax deduction of 200-250 per cent for R&D spending under section 35(2AB) of the Income Tax Act.
During a pre-budget meeting with the finance minister and senior finance ministry officials at North Block, exporters sought the continuation of the interest equalisation scheme (IES), which is set to expire on December 31, along with additional funds for marketing and trade promotion, and income tax relief for micro, small, and medium enterprise (MSME) manufacturing units.
IES is an interest subvention scheme under which exporters receive lower interest rates on their pre- and post-shipment rupee export credits. Banks are compensated by the government for the reduced interest rates. The scheme was introduced to alleviate financial stress among exporters, especially those in labour-intensive and MSME sectors.
Engineering Export Promotion Council of India (EEPC) Chairman Pankaj Chadha recommended increasing the annual benefit cap for MSME manufacturers under IES to Rs 10 crore from the current Rs 50 lakh. If approved, this move would provide significant financial support to MSME exporters.
“A long-term IES will enable exporters to conclude orders more effectively by offering competitive rates, which is crucial for deals with thin profit margins. The interest subvention of 3 per cent could be the deciding factor for winning or losing such orders,” FIEO stated.
Gems and Jewellery Export Promotion Council (GJEPC) Chairman Vipul Shah emphasised the need for a dedicated marketing fund, particularly for promoting diamonds, during the pre-budget discussions.
Exporters also highlighted the need for government support in conducting energy audits and complying with carbon border tax regulations. “We recommend reimbursing 50 per cent of these costs under the market access initiative (MAI) scheme and providing targeted support for Carbon Border Adjustment Mechanism (CBAM) compliance to help MSMEs adopt sustainable practices and remain globally competitive,” Chadha added.
