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Informist, Tuesday, Sept. 9, 2025

 

By Krity Ambey, Priyasmita Dutta and Sagar Sen

 

NEW DELHI – The government may bring back some incentive schemes that were initially rolled out in 2020 and 2021 during the COVID-19 pandemic to support exporters amid trade and tariff uncertainties after the top export destination--the US--imposed 50% duty on Indian goods. New Delhi is working on an incentive package comprising multiple schemes to ease credit and liquidity facilities for exporters and encourage them to explore new markets, two government officials said. 

 

The government is likely to expand the Export Promotion Mission, announced in the Budget for 2025–26 (Apr-Mar) with an outlay of only INR 22.50 billion, into a package to include credit subvention and guarantee schemes and also raise its outlay to INR 200 billion to INR 250 billion, one of the government officials said. The commerce ministry, which is delineating the package in collaboration with the finance ministry will soon send a proposal to the Union Cabinet for approval, the official added.

 

"But we do not want to rush to announce the package without first analysing what are the sectors that will be most impacted by the US tariffs," the official said. "We have already spoken to exporters and the industry to understand their pain points," the official added. 

 

A scheme similar to the Emergency Credit Line Guarantee Scheme may make a comeback under the package, according to the two officials. During the pandemic-riddled year of 2020, the government had announced the Emergency Credit Line Guarantee Scheme, to help businesses meet their operational liabilities and resume businesses in view of the distress caused by the COVID-19 crisis. Under this scheme, the government provided a 100% guarantee against any losses suffered by lenders due to non-repayment of loans by borrowers.

 

Export promotion councils and industry associations, at a meeting with Commerce and Industry Minister Piyush Goyal last week, urged the government to bring back the Interest Equalisation scheme, the second official said. The Interest Equalisation scheme, which ended in March, facilitated exporters to avail interest subvention of 2-3% on pre- and post-shipment credit. 

 

The government may also announce measures to incentivise exporters for market diversification, the official mentioned. Market diversification is an important component of the commerce ministry's four-pillar strategy to mitigate the impact of the US tariffs on Indian exports. The ministry has identified and is focussing on 50 nations with more than 90% share in India's exports. The ministry has also asked its missions abroad to undertake export promotion activities. 

 

The Market Access Initiative Scheme will be a part of the support package, the official said. Under the Market Access Initiative Scheme, the government carries out research to identify the right products for an international market, then implements a country-specific strategy to boost exports. The government also provides financial assistance to exporters to sell more of their products by funding activities related to market expansion.

 

Around 55% of India's exports to the US are subject to 50% duty. It poses a risk to nearly $50 billion worth of Indian exports to the US from labour-intensive sectors such as chemicals and fertilisers, textiles and apparel, gems and jewellery, shrimps and seafood, furniture and beddings, and machinery and mechanical appliances. India had exported $86.51 billion worth of goods to the US in FY25 and had a trade surplus of $40.82 billion.  End

 

 

US$1 = INR 88.14

 

Edited by Akul Nishant Akhoury

 

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