Centre working on multi-Ministry export promotion scheme to counter Trump tariff impact

The Indian government is tweaking its earlier plans for an Export Promotion Mission to make it more targeted towards specific sectors in the wake of the increased tariffs imposed by the U.S. on imports from India, The Hindu has learnt.

This would entail reducing the cost of credit for medium, small and micro enterprise (MSME) borrowers in the worst-hit sectors, expediting clearances, and providing them with some sort of export incentives. It is a joint effort across several Ministries and involves detailed consultations with industry stakeholders.

The sectors which will face the brunt of the U.S. tariffs are apparel and textiles, shrimp exporters, organic chemicals, and machinery and mechanical appliances, according to an analysis by the Global Trade Research Initiative. 

Credit access, faster clearances

“The Export Promotion Mission announced in the latest Budget is being tweaked now to provide more help to particular sectors that are likely to be hit by the [U.S.] tariffs,” a senior government official told The Hindu, speaking on the condition of anonymity since the details of the scheme have not yet been finalised. 

“The broad contours are to provide credit guarantees to MSME exporters, speed up their clearances, and there is some discussion on how to provide export incentives,” the official added. 

In the Union Budget for 2025-26, Finance Minister Nirmala Sitharaman had announced an Export Promotion Mission with a ₹2,250 crore allocation for the current financial year, which would “facilitate easy access to export credit, cross-border factoring support, and support to MSMEs to tackle non-tariff measures in overseas markets”. 

Wide consultations

The government official confirmed that the tweaked Mission would include these targets as well, adding that the Mission was initially meant to be a coordinated effort between the Ministries of Commerce, Finance, and MSME, but would now also include coordination with the Ministry of Textiles and Department of Fisheries.

Industry players have also confirmed that the Ministry of Commerce and Industry has been in regular touch with them to receive their feedback and inputs. Trade analysts, too, confirmed this.

“Internally, authorities are consulting extensively with exporters and sector representatives to fine-tune immediate relief measures and shape a long-term, resilient trade strategy capable of withstanding global shocks,” said Krishan Arora, Partner at Grant Thornton Bharat.

Focus on MSME exports

Separately, a Finance Ministry official also confirmed that the Ministry was coordinating with others to come up with a scheme that could address some of the issues being faced by these exporters. 

The government had, as far back as January, announced a credit guarantee scheme for the MSME sector, which would cover loans up to ₹100 crore. The Finance Ministry official said that this scheme was being revamped to “focus on the export aspects of these MSMEs’ activities”.