Government willing to aid exports, but subsidies not on table
NEW DELHI: Amid a clamour for succour after Trump’s tariff announcement, govt has ruled out demands for subsidy, but suggested it is open to “innovative ways” to help industry beat the crisis.The message was delivered by commerce and industry minister Piyush Goyal during his meetings with some of the industry representatives in Mumbai over the weekend, sources told TOI. During the meetings, Goyal suggested that banks could review the risk assessment & rating models, especially for small exporters, so that the cost of loans comes down. He also agreed to look into proposals for reduction in testing and certification charges for MSMEs.There have been suggestions that govt bears a part of the 10% duty gap between India and competing countries. AEPC chairman Sudhir Sekhri said that some of the American buyers have suggested that they could share a part of the burden but the apparel industry is going to be hit hard, resulting in closure of manufacturing units and loss of jobs. “Buyers are telling us that they will buy from Chinese manufacturers despite a tariff disadvantage of 5 percentage points (30% US tariffs on China) as they are more cost competitive.”After factoring in exemptions available to sectors such as electronics and pharma, he suggested that the hit on Indian exporters across sectors could be to the tune of Rs 34,000 crore a year and argued that govt should consider making good some of the losses.Textiles, leather and footwear, chemicals and shrimps are seen to be among the sectors that will be hurt by the tariffs. But the house is still divided on seafood as countries such as Ecuador are seen to be lacking in scale.“The strong presence of Indian food and beverages in the US market, backed by a mature and reliable supply chain, continues to reinforce trade resilience during these uncertain times. Exporters are working closely with their global partners to honour existing commitments while adopting adaptive strategies that ensure the uninterrupted supply of high-demand products,” said Mohit Singla, founder chairman of Trade Promotion Council of India.EEPC India, representing engineering exporters, has suggested the reintroduction of interest subsidy and payment of dues under the Market Access Initiative scheme. “Reciprocal tariffs will have an impact since duty on India, as compared to our competitor nations, is much higher. We expect engineering exports to drop by $4-5 billion,” said EEPC India’s Pankaj Chadha.
