Government May Launch Four Schemes to Support Exporters Hit by 50% US Tariffs
Share this article:
The Centre is preparing a package of support measures for exporters reeling under Washington’s steep tariff hike, with the Union Cabinet expected to discuss the proposal on Wednesday, reported Business Standard.
According to officials, the plan could involve as many as four schemes, most of them centred on credit and liquidity support, to soften the impact of the 50 per cent punitive duty imposed by the Donald Trump administration on Indian-origin goods.
"The Cabinet may take up the proposal on Wednesday. It will be in line with the credit guarantee schemes announced during the Covid period, especially for the micro, small and medium enterprises (MSMEs)," a government official told BS, requesting anonymity.
Prime Minister Narendra Modi on Tuesday highlighted India’s economic resilience despite global headwinds. Speaking at the Semicon India 2025 conference, he noted that GDP grew 7.8 per cent in the first quarter of FY26, surpassing forecasts.
He acknowledged “aarthik swarth se paida hue chunautiya (challenges driven by economic self-interest)” but stressed that growth had “outperformed every expectation, every estimate, and every forecast.” Trump had previously described India as a “dead economy.”
A centrepiece of that package was the ₹3 trillion Emergency Credit Line Guarantee Scheme (ECLGS), under which businesses—especially MSMEs—could access loans carrying a full government guarantee and no collateral requirement.
In addition, the government launched a ₹20,000 crore subordinate debt scheme for stressed MSMEs and committed ₹4,000 crore to the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE), enabling banks to extend loans to promoters of such units up to 15 per cent of their stake in the business, capped at ₹75 lakh. A ₹10,000 crore Fund of Funds was also set up to provide equity support for growth-oriented MSMEs.
Officials say the new package could mirror that playbook, with schemes designed to stabilise export orders and help companies utilise idle capacity.
"The finance ministry is yet to approve the EPM and has raised concerns and queries regarding some of the schemes that have been proposed. We are waiting for the final approval from the Cabinet because after that it will take time to formulate the rules and implement the schemes," the official cited above added, as per Business Standard.
The Delhi-based Global Trade Research Initiative estimates that US tariffs will affect about 66 per cent of India’s exports to America, worth $86.5 billion. That means nearly $60.2 billion worth of goods could face higher duties.
Officials said the broader aim is to support small exporters and labour-intensive sectors by addressing both financial and non-financial bottlenecks. The proposed schemes include interest subvention for trade finance, factoring facilities, e-commerce export cards, and collateral support.
On the non-financial side, the EPM envisages compliance support, branding and packaging assistance, logistics, and warehousing support.
"It (EPM) may take some more time. The officials were busy with work related to the Goods and Services Tax (GST) reforms," said a finance ministry official, as per the report.
Despite the delays, the government’s goal remains to protect small exporters and labour-heavy industries from a sudden tariff shock, preserve employment, and ensure India does not lose ground in global trade even as protectionism rises.
According to officials, the plan could involve as many as four schemes, most of them centred on credit and liquidity support, to soften the impact of the 50 per cent punitive duty imposed by the Donald Trump administration on Indian-origin goods.
"The Cabinet may take up the proposal on Wednesday. It will be in line with the credit guarantee schemes announced during the Covid period, especially for the micro, small and medium enterprises (MSMEs)," a government official told BS, requesting anonymity.
Focus on Labour-Intensive Export Sectors
The idea is to ensure small firms in sectors such as textiles, apparel, gems and jewellery, leather and footwear, engineering goods, and agri-marine exports can withstand the tariff blow. The measures are aimed at easing working capital stress, preserving jobs, and giving exporters time to explore new markets.Prime Minister Narendra Modi on Tuesday highlighted India’s economic resilience despite global headwinds. Speaking at the Semicon India 2025 conference, he noted that GDP grew 7.8 per cent in the first quarter of FY26, surpassing forecasts.
He acknowledged “aarthik swarth se paida hue chunautiya (challenges driven by economic self-interest)” but stressed that growth had “outperformed every expectation, every estimate, and every forecast.” Trump had previously described India as a “dead economy.”
Echoes of Past Relief Measures
The move recalls measures unveiled during the Covid crisis, when Finance Minister Nirmala Sitharaman rolled out the Atmanirbhar Bharat package in May 2020.A centrepiece of that package was the ₹3 trillion Emergency Credit Line Guarantee Scheme (ECLGS), under which businesses—especially MSMEs—could access loans carrying a full government guarantee and no collateral requirement.
In addition, the government launched a ₹20,000 crore subordinate debt scheme for stressed MSMEs and committed ₹4,000 crore to the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE), enabling banks to extend loans to promoters of such units up to 15 per cent of their stake in the business, capped at ₹75 lakh. A ₹10,000 crore Fund of Funds was also set up to provide equity support for growth-oriented MSMEs.
Officials say the new package could mirror that playbook, with schemes designed to stabilise export orders and help companies utilise idle capacity.
Export Promotion Mission in Focus
One option under consideration is the Export Promotion Mission (EPM), announced in the FY26 Budget and currently with the Expenditure Finance Committee for appraisal."The finance ministry is yet to approve the EPM and has raised concerns and queries regarding some of the schemes that have been proposed. We are waiting for the final approval from the Cabinet because after that it will take time to formulate the rules and implement the schemes," the official cited above added, as per Business Standard.
High Dependence on the US Market
The United States accounts for around 18–20 per cent of India’s merchandise exports, making it the country’s single largest market. In several sub-sectors, exposure is much higher: 60 per cent of carpets, 50 per cent of finished or semi-finished textiles, 30 per cent of gems and jewellery, and 40 per cent of apparel exports go to American buyers.The Delhi-based Global Trade Research Initiative estimates that US tariffs will affect about 66 per cent of India’s exports to America, worth $86.5 billion. That means nearly $60.2 billion worth of goods could face higher duties.
Government’s Proposed Measures
Commerce and Industry Minister Piyush Goyal is slated to meet exporters on Wednesday to discuss sectoral concerns.Officials said the broader aim is to support small exporters and labour-intensive sectors by addressing both financial and non-financial bottlenecks. The proposed schemes include interest subvention for trade finance, factoring facilities, e-commerce export cards, and collateral support.
On the non-financial side, the EPM envisages compliance support, branding and packaging assistance, logistics, and warehousing support.
"It (EPM) may take some more time. The officials were busy with work related to the Goods and Services Tax (GST) reforms," said a finance ministry official, as per the report.
Despite the delays, the government’s goal remains to protect small exporters and labour-heavy industries from a sudden tariff shock, preserve employment, and ensure India does not lose ground in global trade even as protectionism rises.
Next Story