$25 billion opportunity in US: Exporters seek ₹750 crore marketing fund

Synopsis

Exporters requested a ₹750-crore marketing fund over three years to leverage a $25-billion export potential in the US, and a higher cap for interest subvention under export promotion schemes. They sought support amid declining goods exports and aimed to capitalize on opportunities from potential high US tariffs on Chinese goods.

New Delhi: Exporters on Thursday sought a ₹750-crore marketing fund for three years to tap $25-billion export potential in the US and a higher cap for the amount of interest subvention under a key export promotion scheme amid goods exports having contracted to a two-year low of 4.9% on-year in November.

The issues were taken up at a pre-budget consultation that finance minister Nirmala Sitharaman had with stakeholders and experts from export, trade and industry. Production-linked incentive scheme for new sectors like handicraft, establishment of global capability centres (GCCs) in smaller towns and cities, and their transfer pricing norms were also discussed.

Exporters from textiles, electronics, services, gems and jewellery, engineering and medical devices, among others, participated in the meeting.

Aiming to seize the potential opportunities that may arise from US President-elect Donald Trump's threats to impose high tariffs on Chinese goods, exporters also sought lower import duty on products like willow and certain components used in manufacturing electronics.

"A marketing scheme to focus on the US with a corpus of ₹250 crore per year (₹750 crore overall) for three years may be launched to generate additional exports of $25 billion," said Federation of Indian Export Organisations (FIEO) president Ashwani Kumar. He said that higher tariffs on China can create a significant opportunity for Indian exports especially in sectors where Beijing has previously been a dominant supplier.

As per FIEO, India can replace China in sectors like electronics and electrical equipment ($10 billion additional export potential), textiles and garments, toys, chemicals, auto components, footwear, furniture and home decor.

"We have already started contacting key trade associations to present India's sourcing opportunity," Kumar said.

Trump has threatened to impose new tariffs on Mexico, Canada and China as soon as he takes office. The US is India's largest trading partner. In FY24, India's exports were $77.51 billion while imports were $42.2 billion. At the meeting, EEPC India recommended increasing the cap of benefits under the interest equalisation scheme on pre- and post-shipment rupee export credit to above ₹10 crore. The IES is currently available only till December 31, 2024, and that too to manufacturers in micro, small and medium enterprises.

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