In response to the United States imposing a 50% tariff on Indian goods, the Indian government is preparing a series of relief measures to support exporters. These measures aim to ease liquidity stress, provide flexibilities in Special Economic Zones (SEZ), and promote import substitution. The government is also planning to operationalize e-commerce export hubs with simplified return logistics and faster GST refunds.

The Commerce Ministry is developing short, medium, and long-term strategies to help Indian exporters. Immediate steps under consideration include easing liquidity stress and offering greater flexibility to SEZ units to prevent insolvencies and job losses. The government will also prioritize non-financial enablers such as branding initiatives, reducing compliance costs, and cutting logistics expenses.

To mitigate working capital stress and protect jobs, the government is considering steps to ease liquidity constraints, prevent insolvencies and allow exporters to sustain operations until new markets are tapped. Schemes that enable interest subvention, factoring, collateral support, export compliance support, branding and packaging support, logistics and warehousing assistance, especially focusing on MSMEs, will also be launched.

The government is also focusing on optimizing free trade agreements (FTAs), ramping up buyer-seller outreach, and deepening GST reforms to improve competitiveness in the medium term. Many MSMEs are 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.

In the long term, the government plans to build a diversified and globally competitive export base through SEZ reforms and supply chain resilience initiatives. The government is committed to ensuring that Indian exporters are not only cushioned against immediate shocks but also supported to shift to alternate markets and scale competitively.

The government is considering support measures worth approximately Rs 25,000 crore for exporters under the export promotion mission, which was announced in the Budget for six financial years (2025-2031). This mission is proposed to be implemented through two sub-schemes: Niryat Protsahan (over Rs 10,000 crore) and Niryat Disha (over Rs 14,500 crore).

The extension of the export obligation period under the advance authorization scheme for chemicals to 18 months will provide timely and much-needed relief to exporters of man-made fiber (MMF) textiles and technical textiles. These measures will improve ease of doing business as well as improve the competitiveness of Indian products.

The government has extended the duty-free cotton import policy until December 31, 2025, to alleviate the impact of the 50% US tariffs on textile exports. The extension includes an exemption that covers 5 percent Basic Customs Duty (BCD), 5 percent Agriculture Infrastructure and Development Cess (AIDC), and the 10 percent Social Welfare Surcharge, which together previously amounted to an 11 percent import duty on cotton. The measure is expected to reduce input costs across the textile value chain, including yarn, fabric, garments, and made-ups, offering much-needed relief to both manufacturers.

Commerce and Industry Minister Piyush Goyal has assured exporters of all support in dealing with the current global uncertainties caused by the imposition of high tariffs. The government is consulting with all stakeholders, including Indian Missions abroad, for diversification of exports.

These steps are crucial as the imposition of 50% tariffs on Indian goods from August 27 will hit shipments of labor-intensive sectors such as machinery, shrimp, textiles, leather and footwear, and gems and jewelry. The tariffs will make Indian goods less competitive in the US market compared to competitors like Vietnam, Bangladesh, and Thailand. The US has been the largest trading partner of India since 2021-22. In 2024-25, the bilateral trade in goods stood at USD 131.8 billion (USD 86.5 billion exports and USD 45.3 billion imports).