India plans relief package for exporters hit by US tariffs

India will roll out a package of measures to help exporters hurt by a surge in US tariffs, Finance Minister Nirmala Sitharaman said on Friday.

The new US duties slapped on Indian goods last month included a 25% punitive levy over New Delhi’s Russian oil purchases - taking overall duties as high as 50% on a wide range of items from garments and jewellery to footwear and chemicals.

"Government will come out with something to handhold those who have been hit by 50% tariffs," Sitharaman told CNBC TV18, without going into further detail.

The government plans to offer credit guarantees on loans overdue by up to 90 days for small businesses and exporters, Reuters reported earlier, citing government sources.

Exporters said labour-intensive sectors such as textiles, jewellery and seafood, particularly shrimp – which all operate on margins of just 3%-5% - have been hit hardest, causing job losses in industrial hubs in Tamil Nadu and Prime Minister Narendra Modi’s home state of Gujarat.

"Textiles and apparel manufacturers in Tiruppur, Noida and Surat have halted production amid worsening cost competitiveness," SC Ralhan, president of the Federation of Indian Export Organisations (FIEO), said.

The tariffs, among the highest imposed by the administration of US President Donald Trump, delivered a serious blow to ties between the two powerful democracies that had in recent decades become strategic partners.

Nearly 55% of Indian exports to the US, worth about $48 billion, now face a cost disadvantage against rivals from Vietnam, China and Bangladesh, Ralhan said last week ahead of an exporters' meeting with the finance minister.

Thousands of workers have already been laid off, exporters have said.