Amid US tariff hit, Cabinet clears 6-yr Rs 25,000 crore export mission, Pg1.

Key Highlights:

• The Union Cabinet approved a six-year Export Promotion Mission (EPM) with an outlay of Rs 25,000 crore.
• Additional credit facilities up to Rs 20,000 crore were extended to exporters.
• The decision was made due to a 12% decline in shipments to the US in September.
• US tariffs of 50% came into effect on August 27, impacting sectors like textiles and engineering goods.

Detailed Insights:

• The Export Promotion Mission will prioritize support to sectors affected by global tariff escalations, including textiles, leather, gems & jewellery, engineering goods, and marine products.
• The scheme aims to ensure credit availability, reduce credit costs, and support MSME exporters in expanding to new markets.
• MSMEs requested a loan moratorium until a trade deal with the US is signed and sought assistance in machinery upgrades and easier credit access.
• The Income Tax Act provision introduced in the 2023-24 Budget, aimed at securing payments to MSMEs within 45 days, was a key discussion point.
• Labour-intensive sectors like textiles, gems and jewellery, and fisheries are the most affected by the US tariffs.

Key Concepts Involved:

• Export Promotion Mission (EPM): A government initiative to boost exports through financial assistance and support to various sectors.
• MSME: Micro, Small, and Medium Enterprises, which are vital contributors to the Indian economy.
• Tariff: A tax imposed by a government on imports or exports of goods.