India is accelerating its efforts to protect exporters from the impact of rising tariffs imposed by the United States, with detailed guidelines for major export promotion schemes set to be released soon. These schemes are part of the ₹25,060 crore Export Promotion Mission (EPM) that aims to strengthen outbound shipments and help exporters navigate increasing global trade challenges.
The guidelines, expected next week, will focus on the Interest Equalisation Scheme and the Market Access Initiative (MAI). The Interest Equalisation Scheme provides exporters with an interest subsidy on pre- and post-shipment credit, enabling them to borrow at more affordable rates. The Market Access Initiative supports exporters in exploring new markets and expanding their share in existing ones through assistance for promotional activities, market research, and trade fairs. Instructions for the remaining components of the mission are expected by January 15, ensuring that all frameworks are in place before the next financial year.
Approved on November 12, the Export Promotion Mission is designed to help exporters cope with steep tariff hikes imposed by the United States. The mission will be implemented through two sub-schemes: Niryat Protsahan (₹10,401 crore) and Niryat Disha (₹14,659 crore). Niryat Protsahan will focus on improving access to affordable trade finance for MSMEs through instruments like interest subvention, export factoring, and credit cards for e-commerce exporters. Niryat Disha will support non-financial enablers such as assistance for international branding, packaging, participation in trade fairs, and trade intelligence.
Priority support will be extended to sectors impacted by recent global tariff escalations, including textiles, leather, gems and jewellery, engineering goods, and marine products, which are facing challenges in the US market. Due to high import duties, India's merchandise exports to the US declined 8.58% to USD 6.3 billion in October. The US has imposed tariffs as high as 50% on Indian goods.
In October, India's overall exports contracted by 11.8% to USD 34.38 billion due to the impact of US tariffs, while the trade deficit widened to a record high of USD 41.68 billion. Despite these challenges, India's total goods and services exports are up 4% in the first seven months of the financial year.
India is also pursuing a multi-pronged approach, including negotiations with the US for a bilateral trade agreement. A senior government official noted that India has managed to avoid the worst effects of the US tariffs, giving New Delhi leverage in trade discussions. Discussions suggest that the U.S. may consider reversing the 25% duty related to India's oil purchases from Russia and could potentially lower tariffs to around 15%. In return, India is willing to cut import duties on over 80% of goods while maintaining protections for sensitive sectors such as agriculture.
In addition to these measures, India has implemented several supportive initiatives, including trade agreements with the UK, UAE, and Australia, as well as tax reductions on raw materials. Exporters have reported that many companies are compensating for the decline in U.S. demand by expanding into African and European markets while retaining American clients through discounts and flexible delivery options.
The government is also focused on market diversification, logistics reforms, MSME empowerment, and technology adoption to deepen integration with global value chains and position India as a competitive and trusted trading partner. Commerce Secretary Rajesh Agarwal highlighted the ministry's commitment to expanding digital public infrastructure for trade, ensuring faster resolution of trade-related issues, and improving inter-agency coordination to enhance export competitiveness.
