Exclusive: With Trump tariff on, Centre discusses ways to mitigate impact on key industries

US Tariffs India: In response to the additional 25 per cent US tariff, which kicked off on Wednesday on top of the existing 25 per cent, bringing the total to 50 per cent, the central government is holding a series of high-level meetings to tackle the impact of the US doubling tariffs on Indian goods, sources told Zee Business.

This evening, the Commerce Ministry will hold a meeting with EPCs, and over the next few days, discussions will be conducted with all stakeholders. Textiles, gems, jewellery, leather, and other products may be diverted to other countries, sources told Zee Business.

The additional 25 per cent tariff on imports from India, raises total US duties on several Indian products to 50 per cent, affecting sectors like textiles, gems and jewellery, leather, footwear, sporting goods, furniture, and chemicals.

India-US trade tensions escalate

The move comes after weeks of stalled trade talks between New Delhi and Washington, with economists warning it could escalate tensions between the world’s fifth and largest economies. The US Customs and Border Protection (CBP) issued a draft notification implementing the tariff under US President Donald Trump’s Executive Order 14329, which targets countries maintaining close ties with Russia.

India pushes ‘Swadeshi’ response

Meanwhile, Centre is pushing a ‘Swadeshi’ mantra to reduce the economy’s reliance on exports, with Prime Minister Narendra Modi calling on Indians to be “vocal for local” and buy Indian goods on Tuesday. Indian exporters, however, are bracing for a sharp fall in business to the US, with early estimates predicting that more than $47 billion worth of goods will face the 50 per cent tariff rate. 

Soon after, on Tuesday, sources told Zee Business that the government had begun formulating a multi-pronged strategy to mitigate losses. Later that day, the Prime Minister’s Office held a high-level meeting with key stakeholders from affected sectors, including pharmaceuticals, medical equipment, textiles, and engineering goods, aiming to minimise short-term economic impact while strengthening long-term resilience.

Key highlights of Centre's response plan, according to sources:

The discussions focused on a three-point agenda covering market diversification, export promotion mission schemes, and reforms. Commerce and Finance Ministry officials provided briefings, and inputs from stakeholder consultations were reviewed.

High-level inter-ministerial consultations are expected today. Two Empowered Groups of Ministers (eGoMs), chaired by Home Minister Amit Shah and Defence Minister Rajnath Singh, have been formed to lead long-term economic and social reforms, with meetings of these eGoMs likely to be held later this week.

A new export promotion scheme, aimed at boosting India’s competitiveness over a six-year horizon, is in its final stages of preparation. The PMO will present a report on the outcomes of the meetings to the prime minister.

Notably, Zee Business had earlier reported on August 9 that the central government is preparing a Long Term Export Promotion Scheme, which sources say is likely to be announced soon.