How Will India’s $30B Export Package Impact US Trade Tensions?

India is stepping up its response to rising US trade pressures, announcing a $30 billion export package targeting small and medium exporters. The plan comes as President Donald Trump enforces a 50 percent tariff on Indian goods, heightening uncertainties for labor-intensive sectors.

The new Export Promotion Mission, spanning 2025 to 2031, seeks to mitigate fallout from US tariff hikes on Indian exports. Commerce ministry officials say the six-year initiative will strengthen domestic competitiveness, aiming to offset steep costs for key industries.

Two-Tier Scheme Targets Vulnerable Sectors

The support package has two main parts: Niryat Protsahan, which provides more than Rs 10,000 crore for trade finance, and Niryat Disha, which gives Rs 14,500 crore The first pillar includes interest equalization, collateral-free loans, and specialized credit tools for e-commerce exporters.

Meanwhile, Niryat Disha focuses on international compliance, market development, and logistics upgrades. Together, these schemes intend to help exporters absorb cost shocks, meet global benchmarks, and maintain overseas visibility as tariffs bite.

Did you know?
Despite doubled US tariffs, India’s exports to the US total $48 billion annually, over four times its exports to Russia, highlighting the stakes for domestic industries.

Tariff Impact: Key Industries in the Firing Line

The US, accounting for 21% of India's exports, has now imposed some of the highest duties faced by any trading partner. Sectors such as textiles, gems and jewelry, marine products, and leather face cost disadvantages compared to competitors from Vietnam and Bangladesh, who enjoy preferential rates in US markets.

Industry experts warn of export reductions of 40-50% for some sectors unless protection materializes quickly. While pharmaceuticals and IT services remain shielded, goods like auto parts, garments, and seafood risk heavy volume losses with tariffs set at 50% starting August 27.

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Strategic Diversification and Compliance Moves

India’s export promotion schemes strictly adhere to World Trade Organization rules, distinguishing them from earlier incentives that met with compliance challenges.

Commerce Secretary Sunil Barthwal said recent export growth underscores resilience but stresses market diversification to lessen dependence on US trade.

With the finance ministry’s expenditure committee reviewing the plan, Cabinet approval is pending. The six-year mission builds on earlier funds yet to be rolled out and reflects the urgency felt across vulnerable industry groups under tariff strain.

Short-Term Relief or Long-Term Shift?

While the $30B package aims to blunt immediate damage, it may not universally shield all exporters. Small businesses face unique challenges with price-sensitive US buyers.

Market analysts predict that if trade tensions continue or worsen, a combination of financial and strategic actions will likely be required.

Looking ahead, India’s policy response will be tested as global trade dynamics shift and the US pursues similar tariff hikes on other partners. The outcome could mark a major chapter in the future of India’s export-driven sectors.