In the wake of sweeping tariffs imposed by Trump on Indian exports, Government of India is considering to facilitate a support package for the sectors which are massively hit by the US decision. With the support package government is seeking to stimulate the export potential of the hard-hit sectors along with ensuring domestic economic stability and positive growth trajectory.
Currently, US tariffs on Indian goods stand at a massive 50 per cent comprising 25 per cent initial tariffs and additional 25 per cent for purchasing oil from Russia. Areas affected by Trump tariffs are predominantly labour-intensive sectors including marine products, edibles and textiles. Support packages are thus imperative to accelerate the export capacity of these traditional, primitive and grassroot industries, as foreign markets are vital for their survival, sustenance and growth.
The support package will probably have a set of incentives such as higher subsidies, easy access to credit, diversified export market options and easing regulatory norms for exports. Certain sectors such as edibles(seasonal fruits, vegetables), marine products have lower shelf-life and minimum profit margins. People dependent on these sectors are predominantly agriculturists and hail from rural background. Support packages to them are inevitable especially in the short-run to protect this rural and grassroot economy.
Prof. Ram Singh, Scholar in International Trade and Business at Indian Institute of Foreign Trade(IIFT) gives a strategically vital idea to float the support packages. He says, “India can ask Russia for some more discount on oil and use substantial savings from the purchase of cheaper Russian oil to push a support package for exporters who are most vulnerable to American tariffs”.
Indian exporters are asked to dispatch early
Indian exporters are under a panic and clueless situation amidst Trump’s escalating tariff row. “Exporters have been advised lately to frontload their consignments to the United States before the starting date for tariffs. The American sales are highest in November and December because of the Thanksgiving, Christmas and the New Year eve. Exporters have been advised to frontload their consignments meant for these holidays, so that the tariff impact can be comparatively minimized”, said Prof. Ram Singh while speaking to a private media house.
By considering to stimulate a support package, Government of India is rightly focusing on protecting the interests of both the labour-intensive vulnerable sectors and the national economy at large. .
