Here’s how India can offset US President Donald Trump’s 50% tariffs – Details

New Delhi:

Following US President Donald Trump’s latest decision to impose an additional 25 per cent tariff on India for purchasing oil from Russia, the total tariff being imposed on India has gone up to 50 per cent. Indian exporters and businesses are waiting for the repercussions of Trump’s trade war as they also mull over ways to tackle the tricky situation. 

India Exports Products Worth USD 86.51 Billion To The US

Notably, the US is India’s major trading partner, with India exporting products worth USD 86.51 billion to the US across various categories, which include gems and jewellery, shrimp, and textiles. In his recent remark, Trump also mentioned that the India-US Bilateral Trade Agreement has hit a standstill. 

Rs 20,000 Crore Export Promotion Mission

In its bid to diversify its export options, the Government of India is preparing a Rs 20,000 crore export promotion mission, the Economic Times reported. The mission aims to protect exporters from global trade uncertainties.

This mission is being jointly carried out by the Ministries of Commerce and Industry, Micro, Small and Medium Enterprises (MSME), and Finance. It is expected to be finalised by August and implemented by September.

It will encompass five components, including trade finance, non-trade finance dealing with regulation, standards and market access, better brand recall for Brand India, e-commerce hubs and warehousing, and trade facilitation, the ET report further reads. 

Moreover, the GoI is also exploring measures, both for the short term and the long term, to ensure that the Indian industry gets a cushion in the wake of Trump upping the ante. 

Government Considering Sector-Specific Demands

Additionally, the government is also considering sector-specific demands from domestic manufacturing, which includes promotion and extension of existing export promotion schemes, bringing new schemes, working on ease of compliance, as well as trade diversification. 

Experts believe that the government can equip MSMEs and exporters with digital platforms, as well as single windows, aimed at facilitating export credit, insurance, and risk cover. 

The textile sector is likely to be hit the most amidst Trump’s tariffs, as USD 4 billion of business, including t-shirts and home textiles, will bear the brunt, as business rivals like Bangladesh and Vietnam are hit with lower tariffs than India. 

To be able to cope with this scenario, the existing official Export Promotion Mission, which was announced in the Union Budget 2025 26 with an allocation of only Rs 2,250 crore, can be made comprehensive to accommodate specific measures for the textile sector.

What Are The Options For India

According to a report in The Hindustan Times, India can intensify its efforts to explore new markets, allowing US-bound goods to be diverted to other countries.

“Major economies of the world are eager to have free trade agreements with India because of its domestic market,” a person was quoted as saying in the report.

Another option is to tap into domestic demand, as India boasts a large market with aspiring middle-class consumers. We must harness our strength to increase our manufacturing, which will help us substitute imports by encouraging domestic production.