Is it time to relook export plays as relief package kicks in, US tone softens?

India steps up support as tariffs bite

Export-oriented stocks such as textiles, seafood, and IT services have seen a steep correction this year after the US imposed 50 percent tariffs on India. But with the government now rolling out support worth Rs 45,000 crore for industries hit by these duties and even relaxing repayment norms, analysts believe investors may finally have a reason to take a fresh look at these beaten-down sectors, especially with a potential India–US trade deal coming into view.

Independent market analyst Ambareesh Baliga said the government’s export-support package should help cushion the tariff blow. “It could be the right time to revisit these sectors because they have already priced in a worst-case scenario. With a high probability of a US–India trade deal by early next month, this may be a good time to start accumulating,” he said.

The mood improved further after US President Donald Trump exempted several food and agricultural items from his reciprocal tariffs. Coffee, tea, tropical fruits and juices, cocoa, spices, bananas, oranges, tomatoes, beef, and additional fertilisers are no longer covered under the duties he announced earlier this year.

Baliga believes this move is mainly to ease pressure on inflation-hit American consumers, adding that high tariffs are not a sustainable long-term solution, especially when they could start hurting US industry itself.

Back home, the Cabinet last week cleared a Rs 25,000-crore Export Promotion Mission and an additional Rs 20,000-crore collateral-free credit window to support exporters struggling with global trade volatility. The mission, announced in the Budget, will run for six years and aims to improve exporters’ access to credit and innovative financing tools, and tackle India’s logistics cost disadvantages. It also seeks to help companies expand into new markets and address branding and warehousing challenges overseas.

Soon after, the RBI eased repayment rules by giving exporters more time to bring back their proceeds and allowed banks to offer temporary relief on trade-related loans.

Siddhartha Khemka, head of research – wealth management at Motilal Oswal Financial Services, said that this policy support, combined with a softer US stance after India’s reduced intake of Russian oil, could create a sweet spot for export-oriented stocks. According to him, IT and pharma currently look the most promising.

Q2 numbers tell a similar story. In textiles, Welspun Living’s bottomline tumbled 93 percent because of tariff pressure, Vardhman Textiles saw a 14 percent drop in profit, and Gokaldas Exports reported a 71 percent year-on-year decline. Shrimp companies also struggled—Waterbase’s losses widened in Q2, while Coastal Corporation faced margin erosion and rising debt.

That pain is reflected in stock performance. So far this year, textile stocks such as Welspun Living, SP Apparels, Trident, and Dollar Industries have fallen up to 25 percent. IT names including Tech Mahindra, HCL Tech, and Persistent Systems have declined up to 15 percent, and shrimp players like Coastal Corporation and Waterbase have slipped up to 24 percent.