Global Headwinds Prompt Higher Allocation For Export Promotion

New Delhi, Mar 12 (KNN) The Centre is considering allocating additional funds for specific programmes aimed at incentivizing exports, according to a senior government official. 

The Commerce Ministry is likely to request increased allocation as global trade uncertainties rise, particularly in light of potential reciprocal tariffs threatened by the Trump administration, reported Moneycontrol.

The government official indicated that the Commerce Ministry may seek a higher outlay for its Export Promotion Mission, noting that the allocation in the Budget for FY26 might be insufficient. 

"The Budget allocation is not enough, but it isn't cast in stone if we are able to convince more can be given. They have indicated a figure, but we plan to ask for more, so it can increase," the official told Moneycontrol.

In the Union Budget for 2025-26, the Finance Ministry had allocated Rs 2,250 crore towards the Export Promotion Mission, which aims to boost India's MSME sector. 

These efforts to protect the country's exports come at a critical time, as experts anticipate that the US's plans to levy reciprocal tariffs to "correct longstanding imbalances in international trade" could impact Indian chemicals, transportation (automobiles), textiles, and footwear sectors, among others.

The United States is set to implement import duties against trading partners that match the existing levies foreign countries impose on American goods, starting April 2. Officials are currently working out the details of this plan.

Simultaneously, India is negotiating a bilateral trade agreement (BTA) with the US, a decision that was made during Prime Minister Narendra Modi's visit to America on February 13. 

Both nations aim to negotiate the first tranche of a mutually beneficial, multi-sector BTA by fall 2025. India and the US last month also established a new goal called "Mission 500," which aims to more than double their bilateral trade to $500 billion by 2030.

According to media reports, while the US wants India to completely eliminate import duties on cars through the proposed trade deal, India has reportedly agreed to reduce tariffs on certain US imports, such as apples, walnuts, and cranberries.

(KNN Bureau)