India Announces Export Promotion Drive to Counter US Tariffs

The Government of India has launched an export promotion mission to protect exporters from the 50% tariff imposed by the United States, which impacts labour-intensive sectors such as textiles, seafood exports, gems and jewellery, and engineering products. Due to the tariffs, Indian products had become non-competitive in the US market, which is the country's largest exporting destination in the entire world.

India's exports to the US fell by about 28.5 percent between May and October 2025 after tariff hikes. Shipments dropped from 8.83 billion dollars to 6.31 billion dollars during this period. This means India lost about 2.52 billion dollars in export value in just five months.

Tariffs are extra taxes charged on imported goods. When the US raises these taxes, Indian products become pricier in the American market, reducing their competitiveness.

Export Promotion Drive

This promotion move will help exporters find new markets outside the US that will help them diversify trade and build resilience against sudden policy changes. According to Minister of State for Commerce and Industry Jitin Prasad, India is following a multi-pronged strategy with several actions being taken at the same time, including negotiating with the US for a fair trade deal, providing financial relief through the Reserve Bank of India (RBI), offering collateral-free loans to exporters through a credit guarantee scheme, Goods and Services Tax (GST) rationalisation to boost domestic consumption, and holding discussions to reach Free Trade Agreements (FTAs) with different countries.
Immediate relief measures

The RBI has introduced trade relief steps to ease financial pressure on exporters. The government's credit guarantee scheme ensures banks are more willing to lend money since the government shares the risk. GST reforms are also expected to increase local consumption, helping to overcome US trade losses.

Sectors hit by the US tariffs

The US tariffs on Indian goods came into force gradually, starting at 10 per cent in April, 25 per cent in August, and 50 per cent by late August. This includes a 25% punitive tariff against India's Russian oil purchase that the US accuses the country of funding the war against Ukraine.

This sharp tariff increase has badly affected several sectors:

Textiles: Indian textile exports to the US, including cotton yarn, garments, and home textiles, now face a 50 per cent tariff. For example, a shirt worth 20 dollars now costs 30 dollars in the US after the tariff, making it less attractive to buyers.

Shrimp and seafood: Tariffs of 50 per cent have hit India's marine exports, a sector that earns billions annually.

Gems and jewellery face tariffs of around 25 per cent, reducing competitiveness in the luxury goods market.

Engineering goods, petroleum products, and chemicals: These sectors also face higher costs, though exact rates vary.

Between May and October 2025, India's exports to the US fell by 28.5 per cent, dropping from 8.83 billion dollars to 6.31 billion dollars.

The government's long-term plan

To counter these losses, the Union Cabinet has cleared a six-year Export Promotion Mission with an outlay of 25,060 crore rupees. In addition, exporters will get collateral-free credit access worth 20,000 crore rupees.

India is also expanding its export focus from 20 countries to 50 across the Middle East, Africa, Latin America, and Europe, covering about 90 per cent of current export shipments. The goal of this diversification is to lessen reliance on the US market.