Author: Ashwin Manikandan and Shivangi Acharya
MUMBAI, Jan 8 (Reuters) – India’s central bank is considering new ways to support exporters hit by U.S. tariffs, two people familiar with the matter said, after a plan to suspend loan repayments proposed by the central bank last year attracted few takers.
Washington has imposed tariffs of up to 50% on Indian imports, including 25% over New Delhi’s purchases of Russian oil, hitting industries ranging from clothing manufacturing and jewelry to leather goods and chemical companies.
Earlier this week, US President Donald Trump warned that tariffs could rise further unless India curbs its imports of Russian oil, increasing pressure as trade talks between the two countries drag on.
After the US imposed tariffs last year, the Reserve Bank of India and the government introduced relief measures.
In November, India’s central bank offered exporters with U.S. exposure the right to defer repayments on term loans due between Sept. 1 and Dec. 31, but less than a fifth of eligible exporters applied, prompting the central bank to consider other ways to help exporters, a source familiar with its thinking said.
The Reserve Bank of India is weighing whether to relax eligibility criteria for the loan moratorium or allow new loans at subsidized rates, sources said.
Banks are being asked to show proof of revenue losses, something many companies are unable to do before December, a senior public sector banker said, adding that few exporters had applied for a moratorium on payments.
Cash subsidies that could help reduce business losses or the impact of a squeeze on export profits could be more helpful than loan forgiveness, bankers said in talks with the government.
The sources declined to be named because they were not authorized to speak to the media. A spokesman for the Reserve Bank of India did not respond to queries from Reuters.
Awaiting orders for 2026
The central bank and bankers are also in talks with export agencies to assess order flows in the new year before finalizing new relief measures, two sources said.
India’s exports to the US remained resilient till November as many exporters locked in orders ahead of the imposition of tariffs, while others offered to ship goods at lower margins to avoid losing all revenue.
At least four exporters in the textile, chemicals and engineering products sectors said orders fell or profit margins fell in January, raising concerns that existing relief measures may not offset weak demand.
Ajay Sahai, chief executive of the Federation of Indian Export Organizations, said New Year contracts that are usually finalized in December have also been temporarily delayed.