India’s export promotion: The blow of the US decision to slap a 26% import duty on Indian goods may have been softened by a 90-day reprieve, but let there be no illusion: India must recalibrate its export strategy or risk stagnation. In an increasingly fragmented global trading order—held hostage by protectionism, tariffs, and geopolitics—India’s response must be pragmatic, state-led, and deeply rooted in realism rather than ritual invocations of “ease of doing business.”
Let us begin with the obvious. India’s merchandise exports for FY2025 remained flat at $437.4 billion. The world economy is in a flux. The World Trade Organisation is a ghost of its former self. Donald Trump’s return to the White House has reignited economic nationalism. It is a moment of reckoning. Our policymakers are slowly, perhaps belatedly, waking up to this reality.
READ | Pope Francis: The radical reformer who reimagined moral power for a fractured world
Tariff shock and a tired playbook
To cushion the immediate blow, the government has announced a series of measures. Duty drawback rates on gold and silver jewellery have been raised—Rs 335.5 to Rs 405.4 per gram for gold. The Rs 2,250 crore Export Promotion Mission, unveiled in the Budget 2025-26, is finally inching toward implementation. This scheme is expected to offer interest equalisation, market access funds, and credit support to exporters—especially MSMEs.
These are steps in the right direction, but they are akin to using an umbrella in a monsoon. The Export Promotion Mission must be fast-tracked not in months but in weeks. The allocation must also match ambition. A country eyeing $1 trillion exports cannot subsist on underwhelming budgetary support and red tape that scares away its own entrepreneurs.
The bureaucratic wall killing small exporters
The Modi government often boasts of having improved the ease of doing business. But behind the data dashboards and glossy reports lie harrowing stories like that of a rural entrepreneur, who, after building a modestly successful export business, was forced to shut shop due to procedural landmines—duplicate GST levies on returned goods, absurd documentation requirements, and a Kafkaesque regulatory web that stifles even the most spirited exporter.
This entrepreneur’s ordeal—highlighted in a viral Reddit post—tells us what official surveys do not. His account of paying Rs 8 lakh in fees just to close open shipping bills worth Rs 50 lakh reveals a deeper malaise: India doesn’t just lack export-friendly policies; it actively punishes those who try.
We must start by eliminating what not to do.
First, do not waste time on salvaging the WTO. That era is behind us. The US has already walked away from the dispute settlement mechanism. India, a noisy democracy with an open economy and porous regulatory structures, lacks the leverage to lead any WTO revival.
Second, do not retaliate with tariffs of our own. We do not possess the economic heft to match the US blow-for-blow. Nor should we go begging for exemptions wrapped in the language of strategic partnership. Let us accept the global order for what it is: transactional, not sentimental.
Third, give up the myth of a strong rupee. A depreciated rupee benefits exporters. It is time the RBI, in coordination with the Ministry of Finance, allows the rupee to find a level that supports external competitiveness. Japan, China, and South Korea did this successfully. India must shed its obsession with currency strength for prestige’s sake.
Let us now move towards prescription.
First, export promotion must become a bottom-up enterprise. The Union government cannot continue designing export strategies from Delhi and expect universal success. States must be empowered and incentivised to create focused, sector-specific export promotion policies. Each state should identify a handful of sectors where it can build global scale and competitive advantage—textiles in Tamil Nadu, pharma in Telangana, electronics in Uttar Pradesh.
Second, these state efforts must be anchored by large, credible investors. Identify anchor exporters and build ecosystems around them. These firms can attract investment, drive employment, and set standards that MSMEs in their value chains can follow. The government must create a concierge service—think of it as an Export Investment Facilitation Bureau—for each state to identify, attract, and support such anchor investors.
Third, we need a complete overhaul of our Export Promotion Councils (EPCs). Today, most are ceremonial outfits, better at hosting trade fairs than solving trade problems. They must be assigned specific outcome-based KPIs—growth in sectoral exports, new market access, or tariff navigation capabilities—and held accountable.
Fourth, focus sharply on market diversification. With the US imposing tariffs, Indian exports must pivot to Europe, Southeast Asia, and Latin America. The list of 20 focus countries—ranging from Australia to Vietnam—is a good start. But memoranda of understanding and diplomatic overtures alone will not suffice. We need boots on the ground—trade representatives who understand local tastes, regulations, and buyer behaviour.
Fifth, fast-track trade negotiations. The FTAs with the EU, UK, Oman, and New Zealand must be concluded with urgency and without strategic dithering. These agreements must go beyond goods to include services, data, and supply chain resilience.
A closing word
The world is no longer flat. In fact, it is fragmenting faster than anyone expected. Tariffs, friend-shoring, and carbon border adjustments are replacing the open market idealism of the past three decades. India must adapt to this new normal or risk being left behind.
The Export Promotion Mission is a step forward, but unless accompanied by decentralisation, regulatory simplification, and hard-nosed strategy, it will remain another well-intentioned scheme in our bureaucratic museum.
There is no middle path left. Either we fix the system and support our exporters—or we watch them move to Dubai, Singapore, and beyond. India cannot afford to lose another generation of entrepreneurs to red tape and policy inertia. The choice is stark. The moment is now.