India Plans Credit Guarantees to Support Exporters Amid US Tariffs

New Delhi, Aug 13 (KNN) India is considering introducing credit guarantees to help small businesses and exporters cope with the anticipated impact of the recently announced 50 per cent US tariffs on 55 per cent of the country’s merchandise exports.

Industry sources told CNBC-TV18 that the government may allocate around Rs 4,000 crore for the initiative, offering 10–15 per cent credit guarantees to banks for loans to exporters with an annual turnover below Rs 500 crore and loans overdue for up to 90 days.

The Commerce Ministry informed Parliament that discussions are underway with the United States for a Bilateral Trade Agreement (BTA) aimed at enhancing trade and investment by ensuring tariff stability and long-term predictability.

It added that the effect of reciprocal tariffs on exports, including textiles, will depend on factors such as product differentiation, demand, quality, and contractual arrangements.

Last week, Commerce and Industry Minister Piyush Goyal met exporters from the leather and footwear sector in New Delhi. Since the tariff announcement, he has held consultations with exporters from several labour-intensive industries, including agriculture, seafood, food processing, textiles, engineering goods, metallurgical coke, and steel.

Industry representatives have urged the government to provide interim relief. Leather and footwear exporters have sought a 5 per cent duty credit scrip or incentives to offset US import duties, along with interest subvention to manage the impact of global trade uncertainties.

Exporters have also requested officials to press the US to exempt leather and footwear from the new tariffs.

Between April and June of FY26, India’s footwear and leather exports to the US accounted for nearly half of the total exports in FY25, highlighting the sector’s vulnerability to the increased duties.

(KNN Bureau)