Lok Sabha Question No. 364 (UNSTARRED), answered on 2025-12-02
Subject: Impact of Escalation in Tariffs Imposed by USA
Ministry: COMMERCE AND INDUSTRY
Asked by: Shri Ve Vaithilingam

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY DEPARTMENT OF COMMERCE

## LOK SABHA

## UNSTARRED QUESTION NO. 364 ANSWERED ON 02/12/2025

## IMPACT OF ESCALATION IN TARIFFS IMPOSED BY USA

## 364. SHRI VE VAITHILINGAM

Will the Minister of COMMERCE AND INDUSTRY ( वाणिज्य एवं उद्योग मंत्री ) be pleased to state:

- (a) the  recent  escalation  in  tariffs  imposed  by  the  United  States  on  Indian  goods, resulting in a duty increase to 50% on several products including textiles, gems and jewellery,  leather,  and  chemicals,  and  the  overall  implication  of  these  tariffs  on India's export competitiveness,
- (b) the details of steps taken or proposed to be taken by the government to mitigate the impact of these tariffs on Indian exports;
- (c) the measures taken or to be taken by the Government for affected industries such MSMEs, strategies for market diversification to reduce dependency on any single market,  and  efforts  to  maintain  and  strengthen  bilateral  trade  relations  with  the United States; and
- (d) the reasons for any challenges or delays encountered in addressing the impact of these tariffs and the Government's approach to ensuring sustained export growth and resilience of Indian exporters in the face of such trade barriers?

## ANSWER

वाणिज्य एवं उद्योग मंत्रालय में राज्यमंत्री ( श्री णिणिन प्रसाद

)

## THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (SHRI JITIN PRASADA)

(a) to (d)  On July 31, 2025, the U.S. issued an Executive Order (EO) with Reciprocal Tariff (RT) rates for its trading partners. The EO notified country-specific additional ad-valorem duty rates for certain U.S. trading partners including those which have agreed to, or are in the process of concluding trade agreements with the U.S. These tariffs are in the range of 15-41%, with the tariff on India being 25%. The RTs came into effect from 07.08.2025.  The US on August 06, 2025 imposed an additional ad valorem tariff of 25% on India citing its purchase of Russian oil. The tariffs took effect from August 27, 2025. These tariffs apply to  products  in  sectors  such  as  textiles,  handicrafts,  leather,  certain  agriculture  items, marine products and engineering goods.

The Government continues to work to mitigate the impact of the U.S. tariff measures on Indian exports through a comprehensive multi-pronged strategy encompassing intensive engagement with the U.S. Government for a mutually beneficial India-U.S. Bilateral Trade Agreement, immediate relief through Trade relief measures of RBI & Credit Guarantee Scheme for Exporters, enhancement of domestic demand through next generation GST reforms, Export Promotion measures such as the new Export Promotion Mission which provide support and assistance to our exporters, pursuing FTAs with new countries and better  utilization  of  existing  FTA.  It  is  expected  that  these  measures  will  enhance diversification and resilience in India's trade relationships.

Details of some of the aforementioned measures are as follows:

## 1.   Export Promotion Mission

The Mission will provide a comprehensive, flexible, and digitally driven framework for export promotion, with a total outlay of Rs.25,060 crore for FY 2025-26 to FY 2030-31. EPM marks a strategic  shift  from  multiple  fragmented  schemes  to  a  single,  outcomebased, and adaptive mechanism that can respond swiftly to global trade challenges and evolving exporter needs.

The Mission will operate through two integrated sub-schemes:

(i) NIRYAT PROTSAHAN - focuses on improving access to affordable trade finance for MSMEs through  a  range  of  instruments  such  as  interest  subvention,  export  factoring, collateral  guarantees,  credit  cards  for  e-commerce  exporters,  and  credit  enhancement support for diversification into new markets.

(ii)  NIRYAT DISHA - focuses on non-financial enablers that enhance market readiness and  competitiveness,  including  export  quality  and  compliance  support,  assistance  for international branding, packaging, and participation in trade fairs, export warehousing and logistics,  inland  transport  reimbursements,  and  trade  intelligence  and  capacity-building initiatives.

The Mission is designed to directly  address  structural  challenges that  constrain  Indian exports, including

- limited and expensive trade finance access,
- high cost of compliance with international export standards,
- inadequate export branding and fragmented market access, and
- logistical disadvantages for exporters in interior and low-export-intensity regions.

Under EPM, priority support will be extended to sectors impacted by recent global tariff escalations, such as textiles, leather, gems & jewellery, engineering goods, and marine products.  The  interventions  will  help  sustain  export  orders,  protect  jobs,  and  support diversification into new geographies.

2.    Credit Guarantee Scheme for Exporters has also been approved to provide 100% credit  guarantee  coverage  by  National  Credit  Guarantee  Trustee  Company  Limited (NCGTC) to Member Lending Institutions (MLIs) for extending additional collateral free credit facilities up to Rs.20,000 crore to eligible exporters, including MSMEs. The Scheme is  expected  to  enhance  the  global  competitiveness  of  Indian  exporters  and  support diversification into new and emerging markets. Enabling collateral-free credit access will strengthen liquidity, ensure smooth business operations, and reinforce India's progress towards achieving the USD 1 trillion export target.

3. Trade Relief Measures: The Reserve Bank of India (RBI) has also initiated trade relief  measures  for  eligible  affected  exporters  including  provision  for  debt  repayment moratorium and extension of tenor for export credit.
4.   Leveraging Free Trade Agreements: The Government aims for promotion of Export Diversification and has signed 15 Free Trade Agreements (FTAs) and 6 Preferential Trade Agreements (PTAs) with its trading partners. Government is working with all stakeholders to enable our exporters to better utilize the benefits of India's FTAs with major markets such as Japan, Korea, UAE and effectively utilize the opportunities that have been created with  the  recent  concluded  FTAs  such  as  with  the  EFTA  countries  and  the  UK.  The Government is also engaged in negotiations for early conclusion of mutually beneficial FTAs with the EU, Peru, Chile, New Zealand, Oman etc.

The  Government  remains  engaged  with  all  stakeholders-including  exporters,  Export Promotion Councils (EPCs), industry associations, and state governments to assess the evolving impact of the U.S. tariff measures.

In  terms  of  aggregate  statistics,  India's  export  performance  in  the  April-October  2025 period is as given below:

|                                         |   April-October 2025 (US$ Billion) |   April-October 2024 (US$ Billion) |
|-----------------------------------------|------------------------------------|------------------------------------|
| Merchandise                             |                             254.25 |                             252.66 |
| Services*                               |                             237.55 |                             216.45 |
| Total Exports (Merchandise +Services) * |                             491.8  |                             469.11 |

Note: The latest data for services sector released by RBI is for September 2025. The data for October 2025 is an estimation.

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