Centre to hold high-level meeting tomorrow over US tariff hike
What's the story
The Prime Minister's Office (PMO) will hold a high-level meeting on August 26 to discuss the impact of higher tariffs in the US on Indian exporters. The meeting will be chaired by the Principal Secretary to the Prime Minister. Starting Wednesday, Indian goods entering US markets will face a 50% tariff after Washington doubled existing duties, increasing cost pressures on exporters.
Ongoing discussions
Commerce Ministry talks with exporters
The Commerce and Industry Ministry has been holding talks with exporters and export promotion councils to gauge the impact of the current 25% levy. Businesses have said this levy has already affected their margins and competitiveness. The ministry is considering policy options like targeted support for specific industries, instead of broad measures that cover the entire economy.
Financial support
Emergency Credit Line Guarantee Scheme (ECLGS) demanded by exporters
Exporters have asked for an Emergency Credit Line Guarantee Scheme (ECLGS), which would provide collateral-free working capital with government-backed risk cover. However, officials think sector-specific interventions could be more effective. An official said that micro firms have found sector-specific credit lines with collateral support helpful. Cluster-based working capital funds are also being considered to ease liquidity pressures on exporters.
Strategic focus
Focus on protecting SMEs and export-oriented units
The government is focused on protecting export-oriented units and small and medium enterprises (SMEs) from external shocks. This is part of its strategy to deal with the impact of higher US tariffs on Indian exporters. The upcoming meeting will finalize India's response as exporters brace for the tariff hike, which could further squeeze margins, disrupt supply chains, and affect competitiveness in key sectors such as textiles, leather goods, engineering products, and specialty chemicals.