Faced with some of the highest US tariffs in the world, Indian exporters are set to knock on the door of the Reserve Bank of India seeking relief. Industry persons are set tomeet with Governor SanjayMalhotra on Thursday, Sept. 11, seeking easier loan repayment norms and waiver of penal interest, sources told NDTV Profit on Sunday.
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The exporters have pushedfor a 12-month moratorium on credit repayment and demand a relaxed NPA classification on exportloans up to 180 days, sources said. They also want a sovereign guaranteescheme to aid entry into new markets.
- 1 Rate Cut
- 2 GDP forecast
- 3 Rupee
- 4 FAQs on US Tariffs
- 4.1 1. Why are Indian exporters approaching the RBI for relief?
- 4.2 2. What specific support are exporters requesting from the RBI?
- 4.3 3. How high are the tariffs imposed by the US on Indian goods?
- 4.4 4. Which Indian sectors are most affected by these tariffs?
- 4.5 5. How important is the US as an export market for India?
- 4.6 6. What has RBI Governor Sanjay Malhotra said about supporting the economy?
- 4.7 7. Has the RBI already taken steps to ease economic stress?
- 4.8 8. Are exporters seeking any help related to currency conversion?
- 4.9 9. Why is a sovereign guarantee scheme important for exporters?
- 4.10 10. When are exporters scheduled to meet the RBI Governor?
Rate Cut
The Trump administration hasimposed a 25% punitive tariff on India for purchasing Russian oil, on top of a 25% base rate. The 50% tariff is one of the highest in Asia, making Indiangoods uncompetitive compared with manufacturing rivals like Vietnam, South Korea and Bangladesh.
The US is India’s biggest export market, and the tariffs are expected to hurt laborintensive businesses like textiles, footwear, and gems-jewelry the most.
Indicated the central bank’s readiness to take appropriate measures to support the economy. “Whatever is required to support economic growth, including those of sectors that are impacted more, we will not be found wanting in our job,” the RBI Governor told an annual banking conference last month.
GDP forecast
The RBI has lowered India’s GDP forecast by 20 basis points in April after the ‘Liberation Day’ tariff announcements. The central bank has also eased monetary policy by slashing the repo rate by 100 bps and pumping liquidity into the system.
Last week, Bloomberg News reported Indian exporters have lobbied the central bank to allow them to temporarily convert proceeds from their US business at a rupee rate that’s 15% lower than current levels, to help cushion the blow from Trump’s punitive tariffs.
Rupee
Exporters are seeking a rupee exchange rate of around 103 per dollar for US earnings, chairman of the Engineering Export Promotion Council of India, said in a interview to BloombergNews. The rupee has weakened past 88 to the dollar.
FAQs on US Tariffs
1. Why are Indian exporters approaching the RBI for relief?
Indian exporters are facing some of the highest US tariffs globally, making Indian goods less competitive. They are seeking relief from the Reserve Bank of India (RBI) to ease financial pressures like loan repayments and penal interest.
2. What specific support are exporters requesting from the RBI?
They are asking for a 12-month moratorium on credit repayment, relaxed NPA (Non-Performing Assets) classification on export loans up to 180 days, and a sovereign guarantee scheme to help enter new markets.
3. How high are the tariffs imposed by the US on Indian goods?
The Trump administration has imposed a total tariff of 50% on certain Indian exports, combining a 25% punitive tariff for purchasing Russian oil with a 25% base rate.
4. Which Indian sectors are most affected by these tariffs?
Labor-intensive industries like textiles, footwear, and gems and jewelry are expected to be hit the hardest due to their dependence on the US market.
5. How important is the US as an export market for India?
The US is India’s largest export destination. High tariffs there significantly affect India’s export revenues and competitiveness.
6. What has RBI Governor Sanjay Malhotra said about supporting the economy?
Governor Malhotra stated that the RBI is ready to take necessary measures to support economic growth, including assistance to sectors most impacted by external factors like tariffs.
7. Has the RBI already taken steps to ease economic stress?
Yes, the RBI has lowered India’s GDP forecast by 20 basis points, cut the repo rate by 100 basis points, and infused liquidity into the system to stimulate growth.
Yes, exporters are lobbying for a temporary rupee conversion rate of around 103 per US dollar for their US earnings, which is higher than the current rate of 88 per dollar, to cushion the impact of tariffs.
9. Why is a sovereign guarantee scheme important for exporters?
It would provide financial security and encourage Indian exporters to enter new international markets despite high tariffs in the US.
10. When are exporters scheduled to meet the RBI Governor?
Industry representatives are set to meet Governor Sanjay Malhotra on Thursday, September 11, to discuss their demands for financial relief and policy support.