On Friday, Finance Minister Nirmala Sitharaman announced that the Indian government is planning a relief package for exporters struggling under a surge in U.S. tariffs. Sitharaman assured that the government would "come out with something to handhold those who have been hit by 50% tariffs," stating that New Delhi will not leave its exporters "high and dry".

The new duties from the Trump administration include a 25% punitive levy linked to India's Russian oil purchases, raising overall tariffs to as high as 50% on a wide range of goods from garments and jewellery to footwear and chemicals. Labour-intensive sectors with thin 3%-5% profit margins, such as textiles, seafood, and apparel, have been hit the hardest, resulting in significant job losses in industrial hubs in Tamil Nadu and Gujarat. Exporters report that manufacturers in cities like Tiruppur and Surat have halted production amid worsening cost competitiveness.

The proposed package, which requires Cabinet approval, is being designed for the most affected industries. Measures being considered include credit guarantees for small businesses on loans overdue by up to 90 days and Covid-style liquidity relief to ease working capital stress and prevent insolvencies. The tariffs have strained strategic ties between the two nations, putting nearly 55% of Indian exports to the U.S., worth about $48 billion, at a cost disadvantage against competitors from Vietnam, China, and Bangladesh.