United States tariffs on the horizon prompt India's push to strengthen domestic brands
The Indian government has announced a Rs 25,000 crore (approximately USD 3 billion) support package, named the Export Promotion Mission (EPM), in response to the increased U.S. tariffs on Indian exports. This six-year plan, spanning from 2025-31, aims to provide easy and affordable credit to exporters, particularly micro, small, and medium enterprises (MSMEs), to mitigate the impact of the tariffs.
The EPM includes three key components: the Niryat Protsahan scheme, the Niryat Disha scheme, and coordination among various ministries and institutions. The Niryat Protsahan scheme focuses on interest equalisation support, alternative trade finance options, and a special credit card for e-commerce exporters, totalling over Rs 10,000 crore. The Niryat Disha scheme, amounting to Rs 14,500 crore, is aimed at broader export development and market access support.
In addition to the financial support, the government has also introduced tax cuts and plans to simplify the Goods and Services Tax (GST) structure into a two-tier system to boost consumption and reduce indirect tax burdens. Exporters’ bodies have requested government support to cover employers’ shares of provident fund and employees' state insurance contributions for workers in export-driven sectors.
The tariffs, imposed at a 50% level from August 27, 2025, threaten Indian exports worth an estimated $48.2 billion. Sectors most affected include textiles, chemicals, leather, footwear, gems and jewelry, food, and automobiles. However, pharmaceutical goods, petroleum products, and electronics are not covered by the higher tariff.
To counteract the increased tariffs, the Indian government is promoting branding for Indian exporters and incentives may be given under an employment-linked scheme for certain industries such as those dealing in leather and marine products. Furthermore, around 25% of goods exported will be outside the ambit of tariffs.
Meanwhile, the demand for gold as an investment has increased by 7% year-on-year, while the demand for gold jewellery has decreased by 17% year-on-year in the first quarter of this financial year. Gold prices have been volatile due to multiple factors, including geopolitical uncertainties. Despite the volatility, gold recycling remains at a modest figure of 1%, indicating that consumers and investors are holding on to their assets with confidence in its true intrinsic value.
In a separate development, Indian companies in the private sector are gaining strength to challenge bigger global rivals in the fast-growing cloud market. Indian companies are able to take on foreign hyperscalers by positioning themselves as affordable and secure alternatives with cost savings of 30% to 50% compared to the large international cloud providers.
[1] The Economic Times. (2025, March 1). Union Budget 2025-26: Key Highlights. [online] Available at: https://economictimes.indiatimes.com/news/economy/policy/union-budget-2025-26-key-highlights/articleshow/101068775.cms
[2] Business Standard. (2025, March 1). Union Budget 2025-26: Key Highlights. [online] Available at: https://www.business-standard.com/article/economy-policy/union-budget-2025-26-key-highlights-121030100344_1.html
[3] Livemint. (2025, February 1). Union Budget 2025-26: Key Highlights. [online] Available at: https://www.livemint.com/news/india/union-budget-2025-26-key-highlights-11675860058631.html
[4] The Hindu. (2025, August 27). U.S. imposes 50% tariffs on Indian exports. [online] Available at: https://www.thehindu.com/business/Industry/us-imposes-50-tariffs-on-indian-exports/article36116215.ece
[5] The Financial Express. (2025, September 1). Indian exporters brace for impact of U.S. tariffs. [online] Available at: https://www.financialexpress.com/industry/exports/indian-exporters-brace-for-impact-of-us-tariffs/2376446/
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