Trump tariff: Ministry drafts multi-tier plan to shield Indian exporters; check key measures outlined

NEW DELHI: The commerce ministry is working on a comprehensive short, medium, and long-term strategy to help Indian exporters against the impact of the steep 50% US tariffs on Indian goods.The immediate steps under consideration include easing liquidity stress, offering greater flexibility to SEZ units, and promoting targeted import substitution to prevent insolvencies and job losses, PTI reported, quoting an official.The government is also operationalising E-commerce export hubs with simpler return logistics, faster GST refunds, and an inventory model."Alongside, the inventory model for e-commerce exports would allow third-party facilitation entities to manage compliance and logistics, easing the burden on MSMEs and enabling them to focus on quality and branding," the official told PTI.The guiding principles of the plan include ensuring immediate liquidity relief, protecting vulnerable sectors and jobs, strengthening supply chains through structural reforms, and leveraging existing trade pacts while exploring new markets, the official added.And alongside financial support, the government is also prioritising non-financial enablers such as branding initiatives, reducing compliance costs, and cutting logistics expenses, they noted.

In the short term, the ministry is exploring measures to ease liquidity pressures, prevent insolvencies, and provide flexibility for special economic zone (SEZ) units. Efforts will also be made to promote targeted import substitution to reduce external vulnerabilities.The medium-term strategy will focus on optimising free trade agreements (FTAs), ramping up buyer-seller outreach, and deepening GST reforms to improve competitiveness. Many MSMEs remain unaware of tariff benefits under FTAs, prompting the government to plan intensive outreach campaigns, large-scale buyer-seller meets, and exporter delegations to key markets. Sector-specific focus areas include apparel in Australia, gems and jewellery in the UAE, and leather in the UK. India already has trade pacts with more than a dozen economies, including Japan, Korea, ASEAN, Australia, and the UAE.In the long run, the government aims to build a resilient and globally competitive export base anchored in export promotion missions, SEZ reforms, and supply chain diversification. A phased export diversification framework has been mapped, identifying critical HS codes, clusters, and alternative destinations. The approach is twofold: scaling up exports to existing partners like the EU, UK, UAE, Japan, Canada, and Australia, while tapping underexplored regions such as Latin America, Africa, Eastern Europe, and East Asia.Officials warned that the US tariffs could trigger delayed payments, stretched receivable cycles, and even cancelled orders, potentially leading to working capital stress and employment risks. To counter this, GST rationalisation is being considered to stimulate domestic demand, giving exporters opportunities to offset losses by catering more to the local market."The Government of India is proactively responding with a timely, well-calibrated, and comprehensive multi-tiered strategy designed not only to safeguard Indian exporters but also to strengthen our long-term competitiveness in global markets," the official said.The move comes after US slammed 50% tariff on Indian goods over Russian oil imports, raising concerns that nearly $49 billion in shipments, over half of India’s exports to the US could be impacted.