How India Plans to Shield Exporters From U.S. Tariff Shock

From leather makers to shrimp exporters, Indian businesses are worried about losing market share in the U.S. after Washington raised tariffs to 50%.

An additional 25% “secondary tariff” linked to India’s Russian oil imports has further reduced India’s cost advantage, putting these industries under pressure.

The Indian government is now working on ways to help exporters without making the relief appear U.S.-specific. Officials say that if incentives are designed only for the American market, Washington could respond with new countervailing duties, as it has done before.

Instead, the focus is on broad measures that can apply to all markets. These include cheaper export credit for small businesses, lower logistics and freight costs, and wider risk cover through the Export Credit Guarantee Corporation. The government is also pushing exporters to explore new destinations in Africa, Latin America, and Southeast Asia so that they are not overly dependent on U.S. demand.

Industry groups caution that unless quick relief is offered, Indian exporters could lose valuable U.S. market share to rivals like Vietnam and Bangladesh. For New Delhi, the task is a delicate one: protect jobs and exports while avoiding another trade clash with Washington.