India approves $6.6b package for exporters after US tariffs hit
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Information Minister Ashwini Vaishnaw said the package includes collateral-free bank loans to boost exporters' competitiveness in the face of US tariffs, and to help them explore new markets.
PHOTO: REUTERS
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- India's Cabinet approved 450.6 billion rupees to support exporters, including 200 billion rupees in credit guarantees for bank loans, announced Minister Vaishnaw.
- The plan addresses US tariffs, which raised duties to 50% on key Indian exports like garments, impacting labour-intensive sectors and causing job losses.
- Aimed at boosting competitiveness, the programme offers credit guarantees on loans up to 500 million rupees until March 2026 and explores new markets.
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NEW DELHI – India’s Cabinet has approved spending 450.6 billion rupees (S$6.6 billion) to support exporters, including 200 billion rupees in credit guarantees on bank loans, Information Minister Ashwini Vaishnaw said on Nov 12.
The plan includes allocating 250.6 billion rupees over six years for affordable trade finance for small exporters, logistics and market support under an export promotion package to help offset the impact of recent US tariff hikes.
The new US tariffs, including a 25 per cent punitive levy
Exporters said labour-intensive sectors such as textiles, jewellery and seafood, particularly shrimp – which all operate on margins of just 3 per cent to 5 per cent – have been hit hardest, causing job losses in industrial hubs in Tamil Nadu and Prime Minister Narendra Modi’s home state of Gujarat.
The plan includes a 200 billion rupee credit guarantee programme running until March 2026 for collateral-free bank loans to exporters to boost their competitiveness and help explore new markets, Mr Vaishnaw said.
It would provide credit guarantees on loans of up to 500 million rupees, he added.
Nearly 55 per cent of India’s exports to the US, worth about US$48 billion (S$62.5 billion), face a cost disadvantage against rivals from Vietnam, China and Bangladesh, Federation of Indian Export Organisations president S.C. Ralhan told the government, while seeking support.
India’s merchandise exports to the US, its largest market, fell nearly 12 per cent year on year to US$5.43 billion in September, after the 50 per cent tariffs took effect in late August, with engineering goods shipments down about 10 per cent.
On Nov 10, US President Donald Trump said Washington was close to a deal with India
