Context:
New support measures are being finalised by the government for exporters against proposed US tariffs and reciprocal duties. The schemes will be finalised within a month’s period under the Rs 2,250 crore Export Promotion Mission announced in the Budget.
Objectives of the Schemes
- Support for Small Exporters: Special focus on MSMEs.
- Collateral Free Loans: Access to finance has become easier for exporters.
- Compliance Assistance: Exporters shall be assisted in compliance with non tariff regulations of developed countries.
- Alternative Financing Instruments: Encouraging cross border factoring.
- Support on Risky Markets: Aid for exports to volatile areas.
Concerns Among Exporters
- Orders On Hold: Buyers are waiting and watching due to uncertainty over the US tariffs.
- Timid Procurement: Export volumes have fallen, with buyers reluctant to put down their commitment.
- Effect of Tariff in the US: This has set in motion US tariffs on steel, aluminium, and other goods coming from March 12.
Global Trade Dynamics
- Some Exporters Benefit from China Tariffs:
- Indian exporters in labor intensive sectors have benefited from US tariffs on China.
- But it is clear, too early to put a number on benefits.
