Overcoming U.S. taris, the U.P. way, Pg9.

Key Highlights:

• U.S. tariffs have made exports from U.P.’s key sectors—carpets, textiles, leather, handicrafts—up to 33% costlier, leading to reduced orders and production.
• U.P. launched the Export Promotion Policy 2025–30, offering financial incentives, infrastructure upgrades, and logistics support.
• Schemes include 75% freight reimbursement, interest subvention, and virtual trade fairs to access new markets in Europe and Asia.
• The One District One Product (ODOP) scheme remains central, driving exports from 75 districts and empowering artisans.
• New logistics parks and air cargo facilities are being developed to cut transport costs and improve supply chains.
• A ₹1 trillion global investment plan aims to attract buyers and modernize export infrastructure.

Detailed Insights:

• Economic Challenge:
  • The U.S. tariffs, effective from August 27, 2025, placed India’s exports at a disadvantage compared to competitors like Vietnam and Mexico, threatening $6.5 billion worth of trade.
  • High shipping costs and lack of direct port access intensified challenges for inland exporters like those in U.P.
• Policy Response:
  • The new Export Promotion Policy 2025–30 provides:
  • Performance-linked export grants up to ₹20 lakh per exporter annually.
  • Capital subsidy of 40% on export-oriented projects.
  • Enhanced marketing assistance and virtual trade shows for global promotion.
  • Special incentives for small exporters, including freight support and interest reimbursement.
• Infrastructure & Logistics:
  • Development of air cargo hubs and logistics parks (e.g., Bundelkhand region) to streamline export movement.
  • Focus on Bharat Mandapam and Jewar International Airport as export hubs.
• Social Impact:
  • ODOP and handicraft clusters empower rural artisans and MSMEs, boosting employment and inclusive growth.

Scientific/Technical Concepts Involved:

• Performance-Linked Incentive (PLI): Financial reward based on incremental output or export performance.
• Export Subsidy: Government payment to domestic producers to encourage exports by offsetting trade barriers.
• Trade Diversification: Expanding export markets beyond traditional partners to reduce dependency risks.