{"id":131337,"date":"2025-11-13T16:13:13","date_gmt":"2025-11-13T16:13:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/131337\/"},"modified":"2025-11-13T16:13:13","modified_gmt":"2025-11-13T16:13:13","slug":"too-little-too-late-experts-question-if-rs-45000-cr-export-promotion-schemes-can-offset-tariff-pain","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/131337\/","title":{"rendered":"\u2018Too little, too late\u2019: Experts question if Rs 45,000 cr export promotion schemes can offset tariff pain"},"content":{"rendered":"

In a significant move to cushion the impact of steep tariffs imposed by US President Donald Trump<\/a>, the Union government on Wednesday announced a set of schemes with an outlay of Rs 45,060 crore to support exporters across various sectors. The much-awaited government initiatives aim to boost the export sector and help businesses in mitigating tariff-related challenges, thereby enabling them to expand and scale up operations.<\/p>\n

As part of this announcement, the government has approved Rs 25,060 crore for the Export Promotion Mission<\/a> (EPM) and Rs 20,000 crore towards the expansion of the credit guarantee scheme for exporters. Under the EPM<\/a>, priority support will be given to sectors reeling under the impact of recent tariff hikes, such as textiles, gems & jewellery, engineering goods, leather and marine products. <\/p>\n

Too little, too late
Industry experts told ET Digital that while the measures are a step in the right direction, they may have come a little too late. \u201cThis scheme is the right one\u2014though not necessarily at the right time, since exporters have already lost an entire season due to the US tariff,\u201d says Vikas Singh Chauhan, Director, Home Textile Exporters\u2019 Welfare Association (HEWA).<\/p>\n

Experts also drew attention to some of the gaps in the existing outlay framework. Ajay Srivastava, Founder of the Delhi-based economic think-tank Global Trade Research Initiative (GTRI), says that the EPM has significant gaps despite its tall promises. \u201cAnnounced in February, EPM remains a broad framework that still needs detailed schemes with clear eligibility, processes, and disbursal rules, plus a new online system, delays that could keep exporters waiting for months,\u201d Srivastava cautions.<\/p>\n

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Elaborating further, he highlights that the Mission\u2019s total outlay of Rs 25,060 crore over six years amounts to roughly Rs 5,000 crore per year. \u201cLast year alone, the Interest Equalisation Scheme cost more than Rs 3,500 crore, leaving very limited funds for the many activities, such as branding, packaging, trade fairs, compliance, and logistics. The financial resources do not match the Mission\u2019s ambition,\u201d he points out.Besides such challenges, Srivastava adds, there are institutional bottlenecks as well, which will make implementation an arduous task. \u201cThe Directorate General of Foreign Trade (DGFT) has been appointed as the implementing agency, but key financial schemes like interest subvention were earlier run by banks under the supervision of the Reserve Bank of India<\/a> (RBI). Banks link such disbursements with pre- and post-shipment finance. DGFT will need to invest in new learning to discharge this function. This may slow approvals and create operational delays,\u201d he notes.\u2018Budgetary adjustments\u2019<\/p>\n

The EPM was previously announced in the Union Budget 2025-26 to strengthen India\u2019s export competitiveness, particularly for micro, small and medium enterprises (MSMEs), first-time exporters, and labour-intensive sectors. The mission, starting from FY 2025-26 to FY 2030-31, aims to provide a comprehensive, flexible, and digitally driven framework for export promotion.<\/p>\n

However, experts believe that the allocated funds alone may not be sufficient to fully address the challenges. \u201cIndia will also need to finalise additional free trade agreements (FTAs) with various countries. Moreover, exports<\/a> to China have declined by 13% over the past year, while imports from China have risen by 12%, creating a widening trade imbalance that needs to be addressed,\u201d says Badish Jindal, National President, World MSME Forum and All Industries and Trade Forum.<\/p>\n

Simply providing incentives will not be sufficient in the long term, he says, adding that the government will also need to impose strategic import restrictions, similar to those adopted by the US and other countries. \u201cThis dual approach, promoting exports while controlling imports, will ensure more sustainable economic benefits,\u201d he highlights.<\/p>\n

While the EPM is certainly a positive step for exporters, Jindal says, it is crucial to build a consensus with economies like the US, which provides India with net benefits of Rs 3.8 lakh crore annually. \u201cIn contrast, India faces net losses exceeding Rs 8 lakh crore with other countries, including a loss of Rs 8.5 lakh crore with China. Losing the US market would, therefore, be detrimental in the long term,\u201d he says, explaining that it is important to recognise that government incentives for industry are ultimately budgetary adjustments; benefits provided in one area are offset by cuts elsewhere.<\/p>\n

Now or never<\/p>\n

Some exporters, for their part, expressed optimism, calling it a welcome and long-awaited development that has now arrived. Sanjay K Jain, Chairman, ICC National Textiles Committee, and MD, TT Textiles, says that, currently, exporters receive no extra support apart from drawbacks and the RoSCTL (Rebate of State and Central Taxes and Levies) scheme.<\/p>\n

\u201cThis lack of support was a significant gap, especially considering the pressing global economic times characterised by tariffs and geopolitical pressures. The interest subvention scheme that was previously in place has also been removed, and there is no special market access support. Textiles and garments are particularly suffering because of such aspects,\u201d he says, ruefully.<\/p>\n

In August, the US officially imposed an additional 25% tariff on key goods from India, adding to the earlier announced 25% duty and bringing the total US levy to 50%. This had put immense strain and pressure on exporter bottom lines and fulfilling shipment orders.<\/p>\n

Jain says that the recent US tariffs have dealt a severe blow to the sector\u2019s shipments. \u201cIt is very nice to see that the government has mentioned that extra export-focused support will be given under Niryat Protsahan and Niryat Disha. Furthermore, because the announced funds are quite large, they will help us achieve a level playing field across global markets,\u201d he states.<\/p>\n

HEWA\u2019s Chauhan concurs with Jain\u2019s views, adding that the onus is now on exporters to leverage the dynamics at play. \u201cThe government has done its part. We had requested an MEIS-like scheme for a short period, but even so, this new package is sufficient for exporters. Now it\u2019s the exporters\u2019 turn to explore untapped markets and step out of their comfort zones,\u201d he says.<\/p>\n

Explaining further, he adds that we currently export 28-30% of our textiles to the US\u2014roughly $10-11 billion. \u201cBut if we look at the data, there are huge markets like Japan, South Korea, Latin America, and many African countries where our market share is below 1%. In many of these, we don\u2019t even rank second or third,\u201d he notes.<\/p>\n

Chauhan believes that this is the best time for exporters to explore new markets, especially with the UK FTA already in place and trade negotiations progressing with the European Union. \u201cThis scheme will help us navigate financial and operational challenges\u2014so it\u2019s now or never for exporters,\u201d he emphasises.<\/p>\n

Add \"ET as a Reliable and Trusted News Source<\/p>\n","protected":false},"excerpt":{"rendered":"In a significant move to cushion the impact of steep tariffs imposed by US President Donald Trump, the…\n","protected":false},"author":2,"featured_media":131338,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,82195,82196,3472,85,46,21274,627],"class_list":["post-131337","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-epm","tag-export-promotion-mission","tag-exports","tag-il","tag-israel","tag-reserve-bank-of-india","tag-trump"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/131337","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=131337"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/131337\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/131338"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=131337"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=131337"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=131337"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}