The government is preparing to roll out an economic package aimed at helping Indian exporters stay competitive in overseas markets amid severe trade disruptions triggered by US president Donald Trump’s tariff escalation.
A senior official said the commerce ministry has finalised the proposal and forwarded it to the finance ministry, where it awaits clearance from the Expenditure Finance Committee before being placed before the Union Cabinet. The package will combine incentives, policy support and targeted interventions to address both immediate operational challenges and medium-term policy hurdles, with a particular focus on high-potential sectors capable of delivering quick gains in overseas shipments.
The government has been seeking to counter stiff US tariffs by tapping new export markets and offering fresh incentives, even as Prime Minister Narendra Modi has pledged to safeguard the interests of farmers and fishermen. Trump has imposed an additional 25% tariff on Indian goods to penalise New Delhi for its purchases of Russian oil and weapons, effectively doubling the duty on shipments to the US to 50%.
The proposed package, under the Export Promotion Mission, is expected to include raising the duty drawback rate from 1% to as much as 5% to offset the additional tax burden, and reintroducing the interest equalisation scheme to subsidise borrowing costs for exporters. The measures would be funded through a new ₹20,000 crore corpus. Duty drawback refers to the refund of import duties paid on goods used in the production of exports.
Announced in the FY26 budget, the Export Promotion Mission is aimed at easing access to export credit and helping small businesses overcome non-tariff barriers in foreign markets. Economists warn that the US tariff hike could shave 20–30 basis points off India’s GDP growth, bringing it down to about 6.2% in the current fiscal year.
While the government is pursuing dialogue to resolve the dispute and is not considering retaliatory measures, it is moving ahead with the relief package to cushion exporters against the potential fallout. Bilateral trade between the two countries stood at $86.5 billion in Indian goods exports to the US last year, with sectors such as textiles, engineering goods, marine products and gems and jewellery seen as particularly vulnerable. Analysts estimate that shipments from these sectors could drop by as much as 40% if the tariffs persist.
At the inauguration of the new Intellectual Property Office building on Wednesday, Commerce and Industry Minister Piyush Goyal said intellectual property laws have been simplified to improve ease of doing business, and that further reforms could include overhauling legislation on IPR, trademarks and copyrights in line with the decriminalisation approach of the Jan Vishwas Bill.
