US Tariffs: Tough to Regain Market Share

The message has been distilled down by government officials, who have tried to impress this upon exporters in their meetings.

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This exhortation, of course, has been alongside an assurance that the government is formulating a broad-based plan to mitigate, at least in part, the loss of competitiveness of exporters.

This assertion is borne out of the implicit calculation within sections of the Central government that the 25% secondary tariffs on account of Russian oil imports would be drawn down at some point, sooner than later. But whenever that happens, the loss of market share would be difficult to recover as buyers and importers in the US would have already factored in strategies that look beyond India.

Among the likely policy measures are several pandemic-era schemes that were earlier targeted at addressing a demand shock. This includes a broad support package aimed at providing liquidity through collateral-free loans and subsidized interest rates, and likely credit guarantees offered on loans overdue by up to three months for small exporters.

The reintroduction of a provision modeled on an earlier interest equalization scheme, as demanded by the industry, is also being considered.