India Unveils $5 Billion Plan to Combat Foreign Tariffs

India has announced a massive $5billion initiative aimed at sharply boosting its export competitiveness. This new plan is launched as the nation continues to grapple with punishing tariffs imposed by the United States.

Washington has tied its trade policies to geopolitical issues. It levied 50 percent duties on New Delhi in retaliation for India’s continued purchases of Russian oil.

Prime Minister Narendra Modi confirmed the government’s approval of the Export Promotion Mission (EPM) in a statement on Thursday. He stated the mission is designed specifically to “improve export competitiveness.”

Details of the New Framework

The core program, valued at nearly $3 billion, will run until the 2030–31 fiscal year. It replaces several older assistance schemes with a unified framework. This new system is structured to help small manufacturers access cheaper trade finance and meet stringent global quality standards.

A statement from the Ministry of Commerce issued late Wednesday underscored the urgency. “Priority support will be extended to sectors impacted by recent global tariff escalations,” the ministry said. “The mission is designed to directly address structural challenges that constrain Indian exports.”

Additionally, the Minister of Information announced a further $2.3billion “credit guarantee scheme for exporters.” The minister stated this financial support is essential due to the “current global environment… where the policies of some countries are causing hardship to others.”

Economic Context and Headwinds

These combined efforts are intended to significantly boost exports of goods that rely heavily on labor. Target sectors include textiles, leather, gems and jewellery, engineering, and marine products.

India’s economy is currently the world’s fifth largest. It recently achieved its fastest growth rate in five quarters during the three months ending June 30. This growth was boosted by increased government spending and improved consumer confidence.

However, the shadow of U.S. tariffs looms large over the economic outlook. Experts project that these duties could shave between 60 and 80 basis points off India’s GDP growth this fiscal year if the trade restrictions are not eased soon.

Despite the sharp disagreements over agricultural trade and U.S. officials’ accusations that New Delhi’s oil purchases help fuel the war in Ukraine, both India and the United States remain engaged in trade negotiations.

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