US tariffs to impact Indian exports in short term; Govt fast-tracking export promotion measures: Commerce Ministry
The Commerce Ministry on Thursday said the recent imposition of 50 per cent tariffs by the United States will have a short-term impact on India’s exports, particularly in sectors such as textiles, chemicals, and machinery. However, it asserted that the long-term effect on overall trade and GDP will remain limited.
“It is understood that 50 per cent tariffs are going to impact trade, especially the sectors on which tariffs are there. They will suffer some trade loss in the US. There will be an impact on textiles, chemicals, machinery, etc. for the short run, but it will not be a very long-term loss,” a senior Commerce Ministry official told ANI.
The official acknowledged that industry bodies have expressed concern over liquidity constraints due to slowing orders and delayed payment cycles. “In the short run, their orders will slow down. The money that they have to get back from their exports will also slow down. So they will face some liquidity crunch and will be under financial strain to run their operations,” the official said.
According to the official, several industry players have urged the government to consider measures similar to those introduced during the COVID-19 crisis to address immediate financial challenges. “There is a very positive work going on to see how best we can implement their suggestions. The government is seized of the issue, and their concerns are on our agenda,” the official added.
The government is prioritising an accelerated rollout of the Export Promotion Mission (EPM) to cushion the impact of the tariff hike. “Fast rollout of EPM will fill this void and give some impetus and support to the industry. That is something we are focusing on,” the official added.
Highlighting the need for resilient supply chains, the official termed the tariff situation as a “wake-up call” for all stakeholders. “Every little challenge or crisis is a new opportunity. It’s a wake-up call for industry and governments to see how we can diversify our exports, both in terms of the products we offer and the geographies where we sell,” the official said.
The government is also working to boost exports through e-commerce platforms, which it believes can help Indian exporters tap global markets faster. “Through our embassies and market access initiatives, we will support industry delegations to create more B2B connections and open up new market opportunities,” the official added.
On the Bilateral Trade Agreement (BTA) with the US, the official clarified that formal negotiations are not underway at present. “Negotiations and retaliation cannot go hand in hand. Talks have not been taken off the table, but right now we are not discussing the next formal round,” said the official, adding that any trade agreement would need to address the additional 25 per cent tariffs first. Despite the tariff hike, the Commerce Ministry expects the impact on India’s GDP to remain minimal.
Published on August 28, 2025
