With the US imposing a steep 25% duty on Indian goods starting August 7, the Indian government is stepping up efforts to shield its exporters. The focus is on long-term resilience through brand building, policy tweaks, and targeted support for vulnerable sectors like marine products and textiles.
25% Tariff Hits Indian Exports
The US has slapped a uniform 25% tariff on all goods imported from India. That includes over $85 billion worth of exports, cutting across sectors like textiles, seafood, and engineering goods. In comparison, competitors like Vietnam, Bangladesh, Pakistan, and Turkey face tariffs ranging from 15% to 20%.
This puts Indian exporters at a disadvantage, especially in sectors where price sensitivity is high and margins are already tight.
Push for Homegrown Brands
The government is urging exporters to build and promote Indian brands as a strategic move to escape the vulnerability of subsidies and low-margin bulk trade. According to officials, export promotion councils may partner with the India Brand Equity Foundation (IBEF) to drive these efforts.
“It’s important for Indian exporters to invest in branding,” a senior official said, noting that strong brand recognition can help reduce dependence on cost-based competition.
Sector Focus: Marine Products Under Pressure
Marine exports, particularly shrimp, are facing increased competition from Ecuador, which currently enjoys just a 15% tariff into the US. While Indian exporters deal with a 25% rate and a penalty, officials believe the transition to new suppliers won’t be immediate due to capacity constraints.
Still, the government has asked the marine food sector to submit ideas for employment-linked support schemes, tying incentives to job creation.
Support Measures on the Table
To ease pressure on smaller exporters, the Commerce Ministry is considering a reduction in testing and inspection fees through the Export Inspection Council. There’s also discussion around reviving interest subsidies on credit for MSME exporters under a new Export Promotion Mission.
In another proposal, exporters who require key raw materials, such as wheat or rice, might be able to source them at fixed prices from the Food Corporation of India.
Trade Agreement Hopes Dimmed
The tariff hike, paired with a yet-undefined penalty, has also chilled expectations around a potential India–US trade deal. According to export promotion bodies, the sharp policy shift from Washington has made quick negotiations unlikely.
“Clients won’t shift overnight, but the environment has changed,” said a representative, pointing to rising uncertainty and the need for India to act fast in defending its export base.
