NEW DELHI: The government is considering additional export incentives to curb the decline in India’s exports and counter potential reciprocal tariff threats from the Donald Trump administration, sources said.
While the exact form of export incentives is yet to be finalised, the Rs2,250 crore Export Promotion Mission announced in the Budget offers flexibility for further support, as the schemes under it are yet to be notified, they added.
India’s merchandise exports have witnessed a dip in value terms over the past three months. Shipments stood at $36.43 billion in January, down from $37.32 billion a year earlier.
In December, exports were $38.01 billion, slightly lower than $38.39 billion in December 2023. November 2024 saw a steeper drop to $32.11 billion from $33.75 billion in the same month last year.
Commerce and Industry Minister Piyush Goyal is expected to meet export promotion councils on Thursday to discuss trade issues.
The meeting gains significance as the minister recently returned from Washington after holding discussions with US trade officials on boosting bilateral commerce and addressing tariff-related concerns.
Pressure on India’s exports
India’s export sector has been grappling with sluggish global demand, supply chain disruptions, and currency volatility, exacerbated by geopolitical tensions and high interest rates in key markets like the US and the EU.
Slowing growth in China, one of India’s major trading partners, has also dampened export momentum, particularly in commodities like iron ore and chemicals.
The World Trade Organization (WTO) has projected a tepid 3.3 per cent growth in global trade for 2024, citing persistent economic uncertainty.
Against this backdrop, Indian exporters are seeking increased support, including interest subvention, faster GST refunds, and targeted incentives under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme.
Additionally, India is engaged in negotiations with the US, EU, and the UK for trade agreements that could provide long-term relief. The government is also pushing for a greater presence in emerging markets, such as Africa and Latin America, to reduce dependence on traditional export destinations.
