Overview and Key Details
India announced a $5 billion plan on Thursday to bolster the competitiveness of its exports and mitigate the impact of tariffs imposed by the United States. The initiative, known as the Export Promotion Mission (EPM), aims to support small manufacturers in accessing cheaper trade financing, enabling them to meet international quality standards.
Background on US Tariffs
The United States has imposed 50% tariffs on India in retaliation for its oil purchases from Russia. This move has prompted India to develop a comprehensive strategy to counter these tariffs and protect its export industries.
Key Objectives of the Plan
- Support for Small Manufacturers: The plan prioritizes assisting small manufacturers by providing access to more affordable trade financing, allowing them to adhere to international quality standards.
- Focus on Labor-Intensive Sectors: The initiative aims to boost exports of labor-intensive products such as textiles, leather goods, precious stones, engineering, and marine products.
- Duration: The program will run until the fiscal year 2030-2031, replacing previous initiatives with a more comprehensive approach.
India’s Economic Context
India, the world’s fifth-largest economy, experienced a 7.8% annual growth rate between April and June 2025—the fastest pace in the past five quarters. This robust growth underscores the importance of maintaining a competitive export sector amidst rising global trade tensions.
Key Questions and Answers
- What is the purpose of India’s $5 billion plan? The primary goal is to enhance the competitiveness of Indian exports and offset the impact of US tariffs.
- Which sectors will benefit from this plan? The initiative prioritizes labor-intensive industries such as textiles, leather goods, precious stones, engineering, and marine products.
- Who will the plan support? The program aims to assist small manufacturers in accessing cheaper trade financing to meet international quality standards.
- How long will the plan be in effect? The initiative will run until the fiscal year 2030-2031.
