Incentives for Indian Exporters Amid US Tariff Concerns

India is evaluating incentives to support exporters in response to declining outbound shipments and the potential impact of reciprocal tariffs proposed by the US administration under President Donald Trump. These measures are part of the Export Promotion Mission, expected to be detailed within a month.

• India's goods exports have been decreasing since November.
• The US plans to impose reciprocal tariffs from April 2, impacting countries like India by matching the tariffs these countries place on American products.
• India's export momentum has slowed, with a 2.38% decline in goods exports in January, totaling $36.43 billion.
• The merchandise trade deficit has expanded to a two-month high of $22.99 billion.

An official noted the uncertainty affecting exporters, some of whom are diversifying their markets. Despite challenges, exports excluding petroleum, gems, and jewelry remain stable.

Target and Discussions

• India aims to achieve $800 billion in goods and services exports for the fiscal year.
• Discussions on incentives are ongoing among the Ministries of Micro, Small and Medium Enterprises, Commerce and Industry, and Finance.
• The incentive scheme will be adaptable to evolving situations.

Federation of Indian Export Organisations (FIEO) Perspective

• FIEO describes the current export climate as fluid but notes no significant drop in order flow.
• Some buying has become more cautious, with smaller orders being placed.
• FIEO believes Indian exporters can transfer any additional costs to buyers if US tariffs are applied.