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RBI is planning consultations with industry stakeholders in September to assess the sectoral fallout of the 50% US tariffs imposed
RBI
The Reserve Bank of India (RBI) is planning consultations with industry stakeholders in September to assess the sectoral fallout of the 50% tariffs imposed by the US, reported The Economic Times. The discussions are expected ahead of the next monetary policy committee (MPC) meeting scheduled between September 29 and October 1.
The move comes at a time when punitive levies have come into effect, potentially impacting 55% of India’s $48-billion annual shipments to the US. Labour-intensive sectors such as textiles, apparel, gems and jewellery, and marine products are expected to be among the worst hit.
“A consultation is being planned in the wake of an uncertain international economic environment due to tariffs and trade policies,” an official aware of the matter told ET. Record-high tariffs are expected to expose India’s merchandise exports to a pricing disadvantage of 30–35%, reducing competitiveness against China, Vietnam, Cambodia, the Philippines and other Asian exporters.
According to officials, the RBI will also use the stakeholder meeting to review progress on the proposed India-UK Comprehensive Economic and Trade Agreement (CETA).
RBI governor Sanjay Malhotra said on Monday that the central bank is prepared to cushion the economy from the fallout of Washington’s move. He emphasised efforts to expand local currency trade as part of the rupee’s internationalisation. “RBI has always been very proactive in whatever needs to be done for the betterment, advancement and growth of our country,” Malhotra said at an industry event in Mumbai, adding that while 45% of merchandise exports are outside the tariff ambit, sectors such as textiles, gems and jewellery, shrimp cultivation and MSMEs face risks.
Industry Seeks Relief
“The impact of the tariffs is already visible in clusters such as Surat, Kanpur and Tiruppur, with fewer shifts at work,” Anil Bhardwaj, secretary general of the Federation of Indian Micro Small & Medium Enterprises (FISME), told ET. “MSMEs need credit support to sustain working capital and liquidity. Else, the situation may worsen by Diwali.”
Exporters have demanded a one-year moratorium on interest payments, a 30% automatic enhancement of bank limits, collateral-free lending and interest equalisation for MSMEs.
In the textile sector, India exported $6–7 billion worth of apparel to the US in FY25, with nearly 70% of orders placed in July-September. “This year, however, US orders for spring and summer have reduced to almost nil after America decided to slap 50% tariffs on Indian imports,” said Animesh Saxena, general secretary of the Garment Exporters & Manufacturers Association.
MSMEs are now pinning hopes on the India-UK CETA, which once ratified, could open up a sizeable market to offset losses from the US.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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