Prime Minister Narendra Modi, on Tuesday, chaired a high-level meeting at the Prime Minister’s Office to discuss the recent announcement of a 50 percent tariff imposed by the United States on goods imported from India, informed sources said.
The meeting comes in the wake of the US government’s official notification for an additional 25 percent tariff on top of the existing 25 percent duty, effective from August 27.
The meeting included key ministers such as Home Affairs and Cooperation Minister Amit Shah and Commerce and Industry Minister Piyush Goyal, along with senior officials from the commerce and finance ministries.
The 50 percent tariff is expected to potentially affect India’s exports and economy, sparking concerns about a trade war between the two nations.
Economists estimate that the elevated tariff rate could shave off over 0.3 percentage points from India’s growth.
The commerce and industry ministry has been consulting exporters and export promotion councils to understand the impact of the existing 25 percent levy.
Some of the options being considered included targeted support for specific industries, such as sector-specific credit lines with collateral support and easing liquidity pressures for exporters through cluster-based working capital funds. It is also expected that the government might announce a special package for the exporters, including financial relief and special measures for worker security.
Protecting export-oriented units and small and medium enterprises (SMEs) remains central to the government’s strategy, given their vulnerability to external shocks. The government is exploring options to provide relief to these sectors, including potential support measures to mitigate the impact of the tariffs.