New Delhi – In a move aimed at mitigating the impact of steep U.S. tariffs, the Indian government has approved a comprehensive six-year Export Promotion Mission (EPM) with an outlay of Rs 25,060 crore (approximately $3 billion USD). The decision, announced Wednesday, comes as India grapples with a significant decline in exports to the United States following the imposition of 50% tariffs on August 27th.
The U.S. tariffs, implemented after the China-U.S. trade agreement, are currently the highest faced by India globally. Data reveals a concerning trend, with overall shipments to the U.S. dropping by 12% in September. Engineering goods exports, a key sector representing nearly a quarter of India’s total outbound shipments, experienced a 9.4% decline.
In addition to the EPM, the Union Cabinet has approved additional credit facilities of up to Rs 20,000 crore (approximately $2.4 billion USD) to provide collateral-free credit access to exporters. Railway Minister Ashwini Vaishnaw emphasized the mission’s focus on supporting Micro, Small, and Medium Enterprises (MSMEs) to expand into new export markets during a press briefing.
The EPM will prioritize support for sectors particularly affected by global tariff escalations, including textiles, leather, gems & jewellery, engineering goods, and marine products. The government aims to sustain export orders, protect jobs, and facilitate diversification into new geographic regions.
“The mission will provide a comprehensive, flexible, and digitally driven framework for export promotion, with a total outlay of Rs 25,060 crore for FY 2025–26 to FY 2030–31. It consolidates key export support schemes such as the Interest Equalisation Scheme and Market Access Initiative, aligning them with contemporary trade needs,” stated a government release.
The Credit Guarantee Scheme for Exporters (CGSE), also approved by the Cabinet, will provide 100% coverage by the National Credit Guarantee Trustee Company Limited to member lending institutions, enabling them to extend additional credit facilities up to Rs 20,000 crore to eligible exporters, including MSMEs. This is expected to enhance the global competitiveness of exporters and support diversification into new and emerging markets.
Industry leaders have welcomed the government’s intervention. Ashwin Chandran, Chairman of the Confederation of Indian Textile Industry (CITI), believes the EPM will bolster the competitiveness of the textile and apparel sector, enabling it to capitalize on opportunities arising from Free Trade Agreements (FTAs) and diversify into new markets. The textile and apparel sector has been particularly hard hit by the U.S. tariffs, with exports to the U.S., India’s largest market for these goods, declining by over 10% in September.
S C Ralhan, President of the Federation of Indian Export Organisations (FIEO), lauded the EPM as a timely response to structural challenges hindering Indian exports, including limited access to finance, high compliance costs, weak branding, and logistics bottlenecks. He anticipates the initiative will help sustain export momentum, safeguard employment, and diversify India’s export base.
The Gems and Jewellery Export Promotion Council (GJEPC) expressed optimism that measures such as interest subvention and expanded support for trade fairs will particularly empower MSMEs and first-time exporters, fostering wider global outreach and sustainable growth.
