No subsidy lifeline? Govt pushes for "innovative ways" to help exporters tackle Trump tariffs

Economic Times

a day ago

Synopsis
Amidst concerns over US tariffs, the Indian government is exploring alternative support measures for exporters, ruling out direct subsidies. Commerce Minister Piyush Goyal has suggested banks reassess risk models for small exporters and is considering reduced testing fees for MSMEs. Industry groups warn of potential hits to textiles, leather, chemicals, and engineering goods, estimating a possible ₹34,000 crore annual impact.
ANI Representational image Amid growing calls for relief following US President Donald Trump's tariff announcement, the government has ruled out subsidies but indicated it is open to 'innovative ways' to support exporters, sources told The Times of India (TOI).According to sources, Commerce and Industry Minister Piyush Goyal conveyed this during meetings with industry representatives in Mumbai over the weekend. They said Goyal suggested that banks review their risk assessment and rating models, particularly for small exporters, to help lower borrowing costs. He also agreed to examine proposals to reduce testing and certification charges for MSMEs, sources added.Sources told TOI that industry groups, including the Apparel Export Promotion Council (AEPC) and the Engineering Export Promotion Council (EEPC), have warned that higher tariffs will hit sectors such as textiles, leather, chemicals, shrimps and engineering goods. AEPC chairman Sudhir Sekhri flagged concerns over job losses and factory closures, while EEPC India's Pankaj Chadha said reciprocal tariffs could dent engineering exports by $4-5 billion if interest subsidies are not revived.Factoring in exemptions for electronics and pharma, the estimated hit to exporters across sectors could be around ₹34,000 crore annually, sources said. Some American buyers have suggested sharing part of the tariff burden, but competitiveness issues persist, leading them to continue sourcing from Chinese manufacturers despite higher tariffs, they added.At the same time, sources cited Trade Promotion Council of India's Mohit Singla as saying that Indian food and beverage exports to the US remain resilient, supported by a mature supply chain and adaptive strategies.
With inputs from ToI