Govt weighs relief as tariffs put small exporters at risk

Mulls discounts on interest payments, bridge loans and more through state-run banks

- Subhash Narayan & Rhik Kundu

The government is weighing short-term measures, including interest relief and bridge loans, to small exporters as US tariffs increase costs, eroding their competitiveness, said two people aware of the matter.

Public sector banks with significant exposure to export credit have been asked to identify steps that can be implemented quickly to prevent margin erosion and losses for micro, small, and medium-sized enterprise (MSME) exporters, the people said on the condition of anonymity.

"It is being examined whether the government can work with banks to offer exporters discounts on interest payments through interest-rate realignments or waive processing fees," the first person said. "Banks may also consider bridge loans by extending repayment tenures for exporters with strong credit profiles, and bridge financing could be extended to firms with a proven track record."