A paradigm shift: On India and its commerce relations

On August 11, 2025, the central authorities implored India’s seafood trade, that gives livelihoods to about 28 million folks, to “bravely face” the U.S.’s tariffs of 25% that kicked in on August 7, 2025 and which could possibly be raised to 50% on August 27, 2025, contingent upon the end result of commerce negotiations. On August 13, 2025, extremely positioned sources within the Commerce and Finance Ministries instructed The Hindu that the federal government is exploring “tweaking” the Export Promotion Mission (EPM), that was introduced within the 2025 Union Budget, with an outlay of ₹2,250 crore for the present fiscal yr. The EPM, a multi-Ministry undertaking to drive entry to cheaper export credit score, overcome non-trade limitations and insure funds from abroad consumers, focuses on India’s micro, small and medium enterprises (MSME). Initially meant to be pushed by the Ministries of Commerce, MSME and Finance, discussions are on to incorporate the Textiles and Fisheries Ministries. These two industries, which collectively assist about 135 million Indians, kind among the many largest section of MSMEs which can be prone to face probably the most impression as a result of sanctions. The U.S. sometimes accounts for roughly a 3rd of India’s attire and seafood exports yearly.

The authorities’s imploration to additionally diversify into different markets is a tacit admission that the Bilateral Trade Agreement negotiations with the U.S. are deadlocked, and that the non-public equations between Prime Minister Narendra Modi and U.S President Donald Trump haven’t translated right into a win for both facet. Bilateral relations have arguably hit a degree decrease than through the Cold War, as the 2 nations weren’t as enmeshed as they’re now, economically, culturally and militarily. Trade and repair routes and provide chains take many years to construct and undoing them in a single day shouldn’t be attainable. This has been clear from the European Union’s reliance on Russian oil and the worldwide dependence on uncommon earth components from China. While consultations have been ongoing between the federal government and MSME sector stakeholders ever since Mr. Trump introduced “reciprocal tariffs” in April, there’s a refrain now for drastic governmental intervention to safeguard the spine of the economic system — it contributes almost half (45.79% in FY25) of products exports and employs over 28 crore folks. The fisheries sector has sought a 240-day moratorium on pre- and post-shipment credit score compensation, whereas the textiles, attire and gem and jewelry sectors need curiosity subvention. The authorities has, nonetheless, dominated out direct subsidies. But unprecedented challenges require novel responses. The authorities should embody in its arsenal a drastic refashioning of near-term commerce ties with neighbours, particularly, China, which it had ignored within the hope that the assiduous cultivation of ties with Washington would repay.