GS II - Effect of policies and politics of developed and developing countries on India’s interests
Present Circumstances
- US escalated tariffs over Indian Exports.
- The Union Government came up with Short, Medium and Long term measures.
Suffering of exporters
- Liquidity crunch is a major concern for exporters as they have already bought the stock that they would have exported to the U.S. under normal circumstances.
- A critical risk is a drop in order levels, particularly in SEZ-based units which contribute significantly to labour-intensive exports.
Short term Measures
- Providing immediate liquidity and compliance relief to exporters and helping them maintain order levels and employment in vulnerable sectors.
- Building resilience in supply chains, leveraging existing trade agreements, and providing other non-financial assistance to exporters.
- The government tweaking the Export Promotion Mission, announced in the Union Budget 2025, to better align it with the needs of the currently affected export sectors.
- It will include ‘Niryat Protsahan’ or helping exporters with trade finance access such as interest subvention, e-commerce export cards, and collateral support.
Medium- and long-term strategy
- Leveraging the existing Free Trade Agreements that India has signed.
- An export diversification push so that large shares of exports don’t go to any single country.
- Establishing strategic autonomy in crucial sectors.
- Creating digital trade infrastructure in the form of the BharatTradeNet.
