Government considers exporter incentives to lessen possible effects of reciprocal tariff: Report

Commerce and Industry Minister Piyush Goyal is set to meet export promotion councils to discuss trade concerns following his trip to Washington for talks with US officials. Commerce and Industry Minister Piyush Goyal recently held trade talks in Washtington, weeks before US President Donald Trump’s planned reciprocal tariffs take effect.

The Union government is considering additional incentives for exporters to stem a decline in exports and cushion the impact of potential reciprocal tariffs from the United States. While the government has yet to finalise the specifics, Rs 2,250 crore allocated for the Export Promotion Mission in Budget 2025-26 has room to accommodate new measures as the schemes remain to be notified, according to the report.

India’s merchandise exports have fallen for three consecutive months. Shipments in January stood at $36.43 billion, down from $37.32 billion a year earlier. In December, exports stood at $38.01 billion, compared with $38.39 billion in December 2023, while November’s exports fell to $32.11 billion from $33.75 billion a year ago.

Commerce and Industry Minister Piyush Goyal is set to meet export promotion councils on Thursday to discuss trade concerns, days after returning from Washington, where he held talks with US officials. Goyal’s US visit was sudden, as he cancelled scheduled meetings to make the trip, Reuters reported, citing officials familiar with the matter. The visit comes as US President Donald Trump has proposed imposing reciprocal tariffs starting in April on trading partners, including India, raising concerns among Indian exporters in sectors such as automobiles and agriculture.

India has resisted pressure to lower tariffs on agricultural imports, citing the need to protect millions of small farmers, though it has shown willingness to reduce duties on industrial goods such as automobiles and chemicals. The country has already cut tariffs on several items, including lowering duties on high-end motorcycles to 30% from 50% and reducing the levy on bourbon whiskey to 100% from 150%.

The US has been India’s largest trading partner between 2021 and 2024 and remains one of the few nations with which India maintains a trade surplus. In 2023, US-India bilateral trade in goods and services totalled $190.08 billion, with India’s merchandise exports to the U.S. reaching $83.77 billion and imports at $40.12 billion, leaving a $43.65 billion trade surplus in India’s favour.

The government told Parliament that both countries aim to enhance market access, reduce tariff and non-tariff barriers, and strengthen supply chain integration to boost trade ties

In a written reply to Lok Sabha, Minister of State for Commerce and Industry Jitin Prasada said the two nations are working toward a mutually beneficial, multi-sector bilateral trade agreement. The Trump administration has set an April 2 deadline for implementing reciprocal tariffs.