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Exporters' Body Calls For Loans, Short-Term Relief As Trump Tariffs Bite

Faced with the United States' 50 per cent tariff on exports, India has reached out to dozens of nations to up trade in key sectors like textiles and chemicals.

Exporters' Body Calls For Loans, Short-Term Relief As Trump Tariffs Bite
New Delhi:

The Federation of Indian Export Organisations has called for 'swift, coordinated action between industry bodies and government agencies to protect livelihoods (and) reinforce global trade links' to offset the impact of United States President Donald Trump's 50 per cent tariff on Indian goods.

FIEO President Subhash Chandra Ralhan told NDTV the government should offer short-term relief measures, including a 12-month moratorium on repayment of loans and a 30 per cent automatic enhancement of the Emergency Credit Line Guarantee scheme.

He also called collateral-free lending to help exporters past this 'turbulent phase'.

FIEO data, he said, suggests the US' 50 per cent tariff - which India has criticised as "unjust, unfair, and unreasonable" - will affect multiple labour-intensive sectors, such as textile and apparels, shrimp farming, and leather footwear, adding up to exports worth $48 billion.

Mr Ralhan said he had already received reports of textile export units, in Uttar Pradesh's Noida and Surat in Gujarat, shutting down amid uncertainty over the impact of Trump's tariffs.

"This sector is losing ground to (already) low-cost rivals from Vietnam and Bangladesh (both of which face significantly lower tariffs)," he said, also flagging similar concerns for shrimp farmers, for whom the American market absorbs nearly 40 per cent of product exports.

READ | As Trump Tariffs Kick In, A Look At Worst-Affected Sectors In India

"The tariff increases risks... stockpile losses, disrupted supply chains..." he said, "And other labour-intensive sectors, like leather, ceramics, chemicals, and carpets face a sharp erosion of competitiveness, particularly against European, South East Asian and Mexican producers."

To address these and other concerns, Mr Ralhan called for "immediate government support, including interest subvention schemes and support to sustain working capital and liquidity".

Government support must also include investment in infrastructure and cold-chain or storage assets to strengthen competitiveness, as well as market diversification through accelerated trade deals with other nations, including Oman, Chile, and Africa and Latin American nations.

READ | Expand Export Markets, Boost Local Demand: India's Trump Tariff Plan

It is also important, he acknowledged, that India continues to engage with the US, both to bring down these tariffs and progress on the larger trade agreement, a deal that has been stuck for weeks over insistence on access to India's price-sensitive agriculture and dairy markets.

Prime Minister Narendra Modi has been very clear on this point; the US will not be allowed in.

Meanwhile, on the government's plan for new export markets, Mr Ralhan said it takes time to identify and access these centres. What could speed this up, he told NDTV, could be 'promotion of Brand India through investment in quality certifications and innovative export strategies".

'Festive Season Will Strengthen Economy'

NDTV also spoke to Hemant Jain, President of the PHD Chamber of Commerce and Industry, who argued that Trump's 50 per cent tariffs would have a reduced impact since it precedes the festive season in this country, a time that traditionally sees a boost in domestic demand.

"The festive season is starting next month... in this time business grows rapidly and demand also increases. In such a situation the economy will be strong," he said, pointing also to the government's overhaul of the GST, or Goods and Services Tax, framework.

READ | Cars, Phones, Computers. What May Get Cheaper Under New GST

"When GST is reduced on common necessities, then more money will be left in the hands of common people... they will spend more money in the economy," he declared.

Mr Jain also spoke about trade deals with other countries, including the agreement with the UK that Mr Modi and Sir Keir Starmer signed last month and another expected with New Zealand.

Donald Trump's tariffs - a 25 per cent 'reciprocal' levy for duties charged by India on American goods and an equal 'penalty' for buying Russian weapons and crude oil, which India criticised as "unjust, unfair, and unreasonable" - came into effect Wednesday morning.

In FY25 India exported $86.5 billion in goods and services to the US.

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