India Launches Export Promotion Mission to Mitigate Impact of US Tariffs on Key Sectors

The Indian government has initiated an export promotion mission to shield exporters from the 50% tariff imposed by the United States. This tariff affects sectors like textiles, seafood, gems and jewellery, and engineering products. These tariffs have made Indian goods less competitive in the US, which is India's largest export market.

Between May and October 2025, India's exports to the US dropped by about 28.5%. Shipments fell from $8.83 billion to $6.31 billion during this period, resulting in a loss of approximately $2.52 billion in export value over five months. Tariffs are additional taxes on imported goods, and when the US increases these taxes, Indian products become more expensive in the American market.

The US tariffs on Indian goods were implemented gradually, starting at 10% in April, rising to 25% in August, and reaching 50% by late August. This includes a 25% punitive tariff related to India's purchase of Russian oil, which the US claims funds the war against Ukraine. The sharp increase has severely impacted several sectors.

Textile exports from India to the US now face a 50% tariff, affecting items like cotton yarn, garments, and home textiles. For instance, a shirt priced at $20 now costs $30 in the US after tariffs, making it less appealing to buyers. Shrimp and seafood exports also face a 50% tariff, impacting a sector that earns billions annually.

To mitigate these challenges, India is pursuing a multi-pronged strategy. Minister of State for Commerce and Industry Jitin Prasad stated that actions include negotiating with the US for a fair trade deal and providing financial relief through the Reserve Bank of India (RBI). The government is also offering collateral-free loans to exporters via a credit guarantee scheme.

The RBI has introduced trade relief measures to ease financial pressure on exporters. The government's credit guarantee scheme encourages banks to lend more freely as the government shares the risk. GST reforms are anticipated to boost local consumption, helping offset losses from US trade.

Diversification and Long-term Plans

India aims to diversify its export markets beyond the US by expanding its focus from 20 countries to 50 across regions like the Middle East, Africa, Latin America, and Europe. This expansion covers about 90% of current export shipments and aims to reduce reliance on the US market.

The Union Cabinet has approved a six-year Export Promotion Mission with an allocation of ₹25,060 crore. Additionally, exporters will have access to collateral-free credit worth ₹20,000 crore. These initiatives aim to build resilience against sudden policy changes and help exporters find new markets outside the US.