New Delhi: After restructuring GST rates, the Centre is now planning steps to support exporters facing losses due to the 50% tariffs imposed by the US on Indian goods.
According to sources, the government is preparing a relief package for such exporters. Discussions are underway and the scheme is likely to be announced soon.
While the middle class did heave a sigh of relief after Wednesday’s GST 2.0 reforms, the relief package is expected to bring cheer among businesses ahead of the festive season. It will also curb job losses.
The worst affected sectors include textiles, apparel, as well as gems and jewellery, which together account for a large share of India’s exports to the US. Exporters in other sectors are also under pressure. These include leather and footwear, chemicals, engineering products, and agricultural and marine exports.
Such high tariffs would make Indian products less competitive in the US market. Companies have warned that this could result in a drop in orders and weaker demand in the coming months.
The government’s plan will likely address liquidity challenges faced by small and medium exporters, an official said. Many of them are struggling with high working capital requirements, as payments from overseas buyers are taking longer.
The package is expected to make credit more easily available to exporters so they can continue their operations.
Another major goal is to ensure that jobs are not lost, as many of these sectors employ a large number of workers, especially in small towns. The support is being seen as a temporary cushion until exporters can secure new markets outside the US.
The government may design this package on the model of the Covid-19 relief plan. During the pandemic, the MSME sector had been given a Rs 20 lakh crore package to keep businesses running and protect employment. A similar approach may be adopted this time to help exporters face the new tariff challenges.
The government is also moving ahead with its Export Promotion Mission, which was announced in the Union Budget earlier this year.
This mission aims to make Indian products more competitive abroad, expand into new markets, and reduce dependence on traditional trading partners. Together with the relief package, it is expected to give exporters some confidence at a time when trade conditions are becoming more difficult.
