India is preparing a concerted policy response amid mounting pressure from a steep 50% tariff hike imposed by the US, a move experts widely agree could significantly strain exporters, especially in labour-intensive sectors like gems and jewellery.
According to a report in The Economic Times, the Union Cabinet is set to review a quartet of relief schemes aimed at bolstering affected exporters. These initiatives are expected to include financial support, export promotion incentives, and targeted assistance for MSMEs facing serious disruption from the tariffs.
In parallel, Reuters has reported that the Finance Ministry is poised to roll out credit guarantees for small businesses, along with new loan schemes offering 70-75% government backing for eligible exporters. Under this plan, exporters could access loans at lower interest rates with reduced collateral requirements, helping them maintain liquidity and continue operations despite the tariff shock.
These government efforts come at a time when exporters are scrambling to adjust. Many are exploring alternative markets and re-routing strategies to contain the fallout of the U.S. trade barrier, as highlighted in another Reuters analysis that captured the urgency among exporters operating under tightened margins and uncertain demand.
Meanwhile, Indian banks are also stepping up to shield exporters from immediate financial shocks. As reported by The Times of India, financial institutions are offering temporary interest concessions, more flexible repayment terms, and expanded working-capital support. Together with the proposed government-backed loan programmes, these measures are expected to provide a crucial financial lifeline.