Government weighs fresh incentives to shield exporters from Trump tariff blow

The official added that if there is requirement for more funds or fresh incentives to shield exporters, the department of commerce will seek an approval from the finance ministry for the same.

The government is examining the need to grant fresh incentives to exporters to counter the impact of US President Donald Trump’s reciprocal tariffs on the country’s outbound shipments.

“Exporters will meet commerce ministry this week and depending on their feedback, we will decide if any fresh incentives are needed or would the existing schemes that are supporting exporters are sufficient,” a senior government official has said.

Trump has imposed a 26 percent tariff on Indian goods heading to the United States as part of his larger so-called reciprocal duties on his countries trading partners.

If more funds or fresh incentives are needed to shield exporters, the department of commerce would seek an approval from the finance ministry, the official, who requested not be identified, said.

World Trade Organization chief Ngozi Okonjo-Iweala has warned that Trump's tariffs, which set off a selloff across global markets, could cause a contraction of around 1 percent in global merchandise trade volumes in 2025.

According to an analysis by Emkay Global, Indian exports to the US could drop by $30-33 billion (0.8-0.9 percent of the GDP) without adjusting for cross- country hits or responses.

The government has already taken steps to protect exporters through schemes such as Remission of Duties and Taxes on Export Products (RoDTEP), the official added that.

“Don’t just look at the Export Promotion Mission. We have various schemes to the tune of Rs 40,000-60,000 crores for them. So, some provisions have already been made,” the official said.

In the Budget for 2025-26, the finance ministry allocated Rs 2,250 crore towards the Export Promotion Mission, with an aim to boost India's MSME sector.

According to the latest available data, merchandise exports during April- February of the previous fiscal year stood at $395.63 billion against $395.38 billion during the year-ago period. Goods imports came in at $656.68 billion, up from $621.19 billion in the previous year.

The commerce ministry will release the trade figures for March on April 15.