As enhanced tariff regime imposed by US President Donald Trump comes into force in India on Wednesday, Prime Minister’s Office (PMO) will hold a meeting on Tuesday to review its impact on exporters and economy. Principal Secretary to the Prime Minister is likely to chair the high-profile brainstorming session.
Starting Wednesday, Indian goods entering the US market will be subject to a 50 per cent tariff after Washington doubled existing duties, increasing cost of exports. The upcoming PMO meeting is expected to finalise the contours of India’s response as exporters prepare for the tariff increase, sources said on Monday.
The meeting comes amid growing concerns that the 50 per cent US tariff could further strain margins for Indian exporters, disrupt supply chains and affect competitiveness in key sectors ranging from textiles and leather to engineering goods and specialty chemicals.
The Ministry of Commerce and Industry has been consulting exporters and export promotion councils to understand the impact of the existing 25 per cent levy, which firms say has already squeezed margins and reduced competitiveness.
Policy options under discussion include targeted support for specific industries rather than broad, economy-wide measures.
Exporters had requested an Emergency Credit Line Guarantee Scheme (ECLGS), offering collateral-free working capital with Government-backed risk cover, but officials believe sector-specific interventions could be more effective.
Micro-firms have indicated sector-specific credit lines with collateral support are helpful, sources said. Cluster-based working capital funds are also under active
consideration to ease liquidity pressures.
They said protecting export-oriented units and Small and Medium Enterprises (SMEs) remains central to the Government’s strategy, given their vulnerability to external shocks.
Incidentally, Prime Minister Narendra Modi on August 18 held a key meeting on reforms amid US tariff row. Top Union Ministers, including Finance Minister Nirmala Sitharaman, participated in the meeting.
The meeting came days after US President Donald Trump imposed a 25 per cent tariff on all goods India exports to the US, and the planned doubling of the levy to 50 per cent from August 27. The tariffs are likely to impact USD 40 billion worth of Indian exports such as gems, jewellery, textiles and footwear.
Earlier, the sixth round of the proposed India-US Bilateral Trade Agreement (BTA) was postponed as a trade team from Washington deferred its visit to New Delhi. The talks were scheduled to be held from August 25 to August 29.
New Delhi and Washington have committed to concluding the first phase of the BTA by the fall of 2025, and aim to more than double bilateral trade from the current $ 191 billion to $ 500 billion by 2030.
The US has also been pressing New Delhi to open up politically sensitive sectors like agriculture and dairy. India has categorically ruled out such concessions, arguing that they threaten the livelihoods of small farmers and cattle rearers.
Despite tensions, trade ties between India and the US have seen an upward trend. According to commerce ministry data, India’s exports to the US grew 21.64 per cent to $ 33.53 billion, while imports rose 12.33 per cent to $ 17.41 billion during April-July 2025.
