India seeks to boost local brands as higher US tariffs loom

Question: With the US administration levying across the board 25 per cent tariff, and additional penalty of 25 per cent, on all Indian origin goods, will the government be inclined to give subsidies to exporters?

- HP Ranina

ANSWER: Instead of providing subsidies, the government is pushing Indian exporters to build and promote brands as branded products command a value which affluent American consumers may be willing to pay for. The brand promotion exercise would be undertaken jointly by export promotion councils and the India Brand Equity Foundation.

Incentives may be given under an employment-linked scheme for certain industries such as those dealing in leather and marine products. This would benefit both the domestic and export sectors as a result of higher production and lower costs, thereby mitigating the effect of the increased tariff rate. While some countries competing with India enjoy lower tariff, they may not be able to create adequate capacities immediately to meet the shortfall and therefore Indian goods will continue to meet the demand in the US.