India Seeks Export Boost Amid US Tariffs; Exporters Demand Policy Support

Heading: India's Export Strategy Amidst Global Headwinds

Commerce and Industry Minister Piyush Goyal held discussions with various sector exporters to devise strategies for boosting outbound shipments. The meeting addressed the challenges posed by global economic turmoil, particularly tariffs imposed by the United States. Exporters emphasized the need for continued government policy support in four key areas: affordable and accessible export credit, a stable and predictable policy regime, reduced compliance burdens, and enhanced trade facilitation, especially for Micro, Small, and Medium Enterprises (MSMEs). Mithileshwar Thakur from the Apparel Export Promotion Council (AEPC) highlighted these needs. Exporters also urged the government to launch a long-awaited Export Promotion Mission focused on improving export credit access, supporting cross-border factoring, and assisting MSMEs in overcoming non-tariff barriers. This initiative aims to help India achieve its ambitious $2 trillion export target by 2030. The impact of US President Donald Trump's 50% tariffs, implemented from late August, has been severe, causing a nearly 12% decline in India's exports to the US in September to $5.46 billion. Between May and September, exports to the US have fallen by approximately 37.5%, resulting in a loss of over $3.3 billion in monthly shipment value, according to the research body GTRI. Sectors like textiles, gems and jewellery, engineering goods, and chemicals have suffered the most. To mitigate these extraordinary pressures, the Federation of Indian Export Organisations (FIEO) recommended a moratorium on principal and interest payments for export-related loans until December 31, 2026. They also called for the restoration of the interest equalization scheme, potentially with a cap, and extended working capital and inventory financing support for SMEs under relaxed lending norms. India's overall goods exports growth remained nearly flat in FY25, with a marginal increase of 0.08% to $437.42 billion.

Impact: This news directly impacts Indian businesses involved in exports, their profitability, and the broader Indian economy's trade balance. It highlights potential slowdowns and pressures on export-oriented industries, which could affect investor sentiment for companies in these sectors. The focus on policy support suggests government intervention to cushion these impacts. Rating: 7/10.

Heading: Difficult Terms Explained

* **Outbound Shipments**: Goods and services exported from one country to another. * **Global Economic Turmoil**: Significant instability and uncertainty in the global economy, often characterized by financial crises, recessions, or geopolitical disruptions. * **Tariffs**: Taxes imposed by a government on imported or, sometimes, exported goods. * **Export Credit**: Financial support provided to exporters, such as loans or guarantees, to facilitate their business. * **Policy Regime**: The set of laws, regulations, and government policies that govern economic activities. * **Compliance Burden**: The cost and effort required for businesses to adhere to laws and regulations. * **Trade Facilitation**: Measures aimed at simplifying, modernizing, and harmonizing trade procedures to reduce the time and cost of exporting and importing goods. * **MSMEs**: Micro, Small, and Medium Enterprises – businesses of varying sizes that are crucial for employment and economic growth. * **Export Promotion Mission**: A government initiative dedicated to planning and executing strategies to boost a country's exports. * **Cross-border Factoring**: A financial transaction where a company sells its foreign accounts receivable (invoices) to a factor (financial institution) at a discount to obtain immediate cash. * **Non-tariff Barriers**: Restrictions on trade that are not directly related to import duties, such as quotas, sanctions, regulations, and technical standards. * **FY25**: Fiscal Year 2025, which typically runs from April 1, 2024, to March 31, 2025, in India. * **Federation of Indian Export Organisations (FIEO)**: An apex body representing Indian export promotion councils and other export-related organizations. * **Moratorium**: A temporary suspension of payments on loans. * **Interest Equalisation Scheme**: A government scheme to provide an interest subsidy on pre- and post-shipment export credit to eligible exporters. * **Working Capital Support**: Financing provided to cover a business's day-to-day operational expenses. * **Inventory Financing**: Loans provided to businesses specifically to finance their stock of goods.