The Centre is preparing a multi-pronged strategy to mitigate the impact of the 50% tariff imposed by the US on Indian goods starting Wednesday, with US $ 48.2 billion worth of merchandise exports to the country set to come under the punitive levy. Labour-intensive sectors, particularly textiles, are seen as most vulnerable. India’s exports to the US stood at US $ 86 billion in FY ’25.
Exporters noted that textile and apparel manufacturers in Tirupur, Noida and Surat have already halted production, citing loss of competitiveness against lower-cost rivals in Vietnam and Bangladesh. The US Department of Homeland Security, in a draft order, specified that the duties would apply to Indian products “entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am Eastern Daylight Time on August 27.”
Senior officials said high-level meetings are under way to assess the situation, though retaliation has been ruled out. One official stated that deliberations within the government were ongoing alongside meetings with industry stakeholders. Another official confirmed that proposals such as the Export Promotion Mission and amendments to SEZ rules were under active consideration.
India and the US are in discussions on a bilateral trade agreement (BTA), though American negotiators have postponed a visit that was scheduled for 25th August.
To cushion exporters, the commerce and industry ministry is working on a Rs. 25,000-crore (US $ 3 billion) Export Promotion Mission. The initiative is expected to include trade and non-trade finance, regulatory support, standards and market access, stronger branding under “Brand India,” e-commerce hubs, warehousing facilities and broader trade facilitation.
