The Centre is likely to provide financial relief to affected businesses to cushion the impact of United States’ decision to slap 50 per cent tariffs on Indian goods.
The government is holding talks with exporters to increase shipments of textiles, leather, gems and jewellery to other countries, a source said to Reuters.
"We are taking appropriate steps so that it does not harm our economy, and let me assure you that the strength of our economy will carry us through these times. Our concern is our energy security, and we will continue to purchase energy sources from whichever country benefits us,” junior foreign minister Kirti Vardhan Singh said on Wednesday.
The US move takes total duties to as high as 50 per cent for goods such as garments, gems and jewellery, footwear, sporting goods, furniture and chemicals - among the highest imposed by Washington and on par with Brazil.
New Delhi hoped the US would review the extra 25 per cent tariff.
The move threatens jobs in labour-intensive sectors like textiles, leather, gems and jewellery, while competitors in Vietnam, Bangladesh and China stand to gain.
Earlier, Federation of Indian Export Organisations (FIEO) president S.C. Ralhan had asked the government to step in with immediate measures such as a one-year moratorium on repayment of principal and interest, collateral-free lending on ECLGS lines, and quick expansion of PLI schemes.
“Expanding PLI schemes, enhancing infrastructure, and investing in cold-chain/storage assets to strengthen competitiveness and aggressive market diversification through accelerated trade agreements (FTAs) with the EU, Oman, Chile, Peru, GCC, Africa, and other Latin American countries, with a provision for early-harvest for labour-intensive sectors, should be prioritised,” Ralhan said.
But the hit is already showing in disrupted supply chains and nervous exporters staring at cancelled orders.
Industry bodies also asked for “strong government support”.
Assocham president Sanjay Nayar said, "With strong government support, this disruption will not weaken India’s trade ambitions, it will only strengthen India’s resolve toward resilience, self-reliance and global leadership.”
The Centre is also exploring opportunities in other countries.
India's existing trade agreements with the UK, Australia, the United Arab Emirates and other European countries also offered opportunities to boost Indian exports, particularly textiles, the source said to Reuters.
“Our businesses have a proven track record of adapting quickly, innovating and expanding into new frontiers. Exporters across textiles, gems & jewellery, agriculture and shrimps face steep duties, yet they are accelerating diversification into Africa, Latin America, Europe and ASEAN, while strengthening competitiveness at home," Nayar said.
Washington says India's purchase of Russian oil funds Moscow's war in Ukraine and New Delhi also profits from it. India has rejected the accusation, pointing at US and European trade links with Russia.
