The Indian government is evaluating fresh incentives for exporters as a response to US President Donald Trump’s recent decision to impose a 26% tariff on Indian goods. This move is part of Trump’s broader strategy of reciprocal duties on trade partners.
According to a senior government official, the commerce ministry is expected to meet with exporters later this week. Based on their feedback, the ministry will decide whether existing support schemes suffice or if new financial measures are required.
“If additional support is needed, we’ll seek approval from the finance ministry for new funds or incentive programs,” the official said on condition of anonymity.
Global Trade Concerns Mount
World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala recently cautioned that such tariff actions could lead to a 1% contraction in global merchandise trade volumes by 2025. The ripple effect of Trump’s tariffs has already triggered significant selloffs in global markets.
A report by Emkay Global suggests that Indian exports to the US may decline by $30–33 billion—equivalent to 0.8–0.9% of GDP—if no mitigating measures are taken.
Existing Schemes Already in Play
The government has implemented schemes such as the Remission of Duties and Taxes on Export Products (RoDTEP) to cushion the blow. “Beyond the Export Promotion Mission, there are other schemes totaling Rs 40,000–60,000 crore to support exporters,” the official noted.
In the 2025–26 Union Budget, Rs 2,250 crore was earmarked for the Export Promotion Mission, aimed particularly at boosting India’s MSME sector.
Trade Snapshot
Merchandise exports from April to February of the last fiscal year reached $395.63 billion, nearly unchanged from $395.38 billion in the same period a year earlier. Imports stood at $656.68 billion, compared to $621.19 billion previously.
The commerce ministry is set to release March’s trade data on April 15.
