New Delhi has announced a series of steps to cushion the impact of the United States’ sudden decision to impose 50% tariffs on Indian exports.
The government’s response includes legal action at the World Trade Organization (WTO), financial incentives for exporters, tax relief and efforts to expand into new markets.
The tariffs have dealt a blow to key Indian industries such as textiles, leather, gems, and chemicals. With the rupee under pressure, markets turning volatile, and export losses estimated at 20–30%, the government is pursuing a multi-pronged strategy.
India has lodged a formal complaint with the WTO, challenging the US tariffs. Officials are also considering retaliatory duties on selected American products, particularly in automobiles, textiles, and leather.
To support exporters, the government has announced rebates on VAT and GST, easier access to credit, subsidies, and duty refunds for micro, small, and medium enterprises (MSMEs). Under a Rs 25,000 crore Export Promotion Mission, measures have been outlined to strengthen trade finance, brand-building, e-commerce, and warehousing facilities.
Nearly 50 new export destinations have been identified across Latin America, Africa, Southeast Asia, and Europe. At the same time, New Delhi has urged Washington to consider tariff concessions in pharmaceuticals and electronics, two sectors where US dependence on Indian supply is significant.
Indian Prime Minister Narendra Modi has linked the tariff issue to protection of domestic industries, calling on citizens to support locally made products.
“Protecting our farmers and small entrepreneurs is the government’s commitment. No matter how much pressure comes, India will never bow down,” he said.
Economists noted that tax relief and incentives may provide temporary relief, but stressed that long-term solutions lie in diversifying markets and restructuring supply chains. India’s case at the WTO, they say, could strengthen its position, though any resolution will also depend on political negotiations.
India’s move comes amid wider pushback against US trade policy. Countries including Russia, China, Brazil, and South Africa have expressed support for New Delhi. Analysts also point to growing strains within NATO and reports of other nations exploring closer ties with emerging blocs.
Protests have taken place in several American cities, with demonstrators demanding a reversal of the tariff policy. Opposition lawmakers have voiced concern, saying the measures could damage both the US economy and relations with key trading partners.
In addition to filing the WTO case, India has introduced restrictions on imports of American almonds, tightened rules for postal parcels, and shifted rice exports toward African markets. While New Delhi has not restricted exports of steel, copper, aluminum, pharmaceuticals, or automobiles to the US, analysts caution that any disruption in pharmaceutical supplies would have significant implications for American consumers.
Reports suggested US President Donald Trump had held several phone calls with Modi to discuss the issue. Meanwhile, India has maintained its oil trade with Russia, a practice also followed by other countries.
Ukraine’s President Volodymyr Zelensky is expected to visit New Delhi, while Russian President Vladimir Putin is also scheduled to travel to India for talks. Modi is additionally set to attend the ASEAN summit in China on Sunday — his first participation in seven years.
