Indian exporters are urging the government to allocate Rs 750 crore over three years to capitalise on a $25 billion export potential in the US, as evolving trade dynamics create new opportunities
Indian exporters are urging the government to allocate Rs 750 crore over three years to capitalise on a $25 billion export potential in the US, as evolving trade dynamics create new opportunities. The Federation of Indian Export Organisations (FIEO) has identified the US market as a key area for growth, especially as potential tariff increases on Chinese goods by the US government loom on the horizon.
During a pre-Budget meeting with the finance ministry, FIEO President Ashwani Kumar emphasized the need for a robust marketing strategy to penetrate the US market. “A dedicated fund of Rs 250 crore annually for three years can drive an additional $25 billion in exports,” he stated, highlighting sectors like electronics, textiles, chemicals, toys, and auto components as areas where India could replace China as a leading supplier.
Kumar underscored the importance of targeted marketing, participation in exhibitions, and collaborations with key trade associations to boost India’s visibility as a sourcing hub. “We have already initiated dialogues with trade bodies to present India’s capabilities,” he added, advocating for a proactive approach to seize emerging opportunities.
The FIEO also called for extending the 5% Interest Equalisation Scheme (IES) beyond its current expiration date of December 31, 2024. Kumar argued that Indian exporters face higher domestic interest rates compared to competitors from export-driven economies like China, Japan, and South Korea. “Restoring the IES to its original 5% for MSMEs is crucial to reducing credit costs and enhancing global competitiveness,” he said.
Exporters outlined other key demands, including:
The gems and jewellery industry, which has seen a decline in exports, sought budgetary support for consumer education and platinum duty drawback benefits. GJEPC Chairman Vipul Shah highlighted ongoing projects like the world’s largest jewellery park in Mumbai and similar initiatives in Bengaluru and Meerut, urging the government to ease credit access for these developments.
FIEO Director General Ajay Sahai pointed out a worrying decline in export credit despite a rise in exports. Between March 2022 and March 2024, export credit fell by 5% even as exports grew by 15%. “The lack of collateral-free credit remains a major hurdle,” Sahai said, urging prioritised lending under the Priority Sector Lending (PSL) scheme.
The US remains India’s largest trading partner, with bilateral trade reaching $77.51 billion in 2023-24. Exports to the US rose 6.31% during April-October 2024, signaling continued demand. However, experts warn that potential changes in US trade policies could impact sectors like textiles, automobiles, and pharmaceuticals if protectionist measures are implemented.
The evolving global trade landscape presents both challenges and opportunities for Indian exporters, with strategic government support being crucial to unlocking the sector’s potential in the coming years.
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