New Delhi: Finance Minister Nirmala Sitharaman, in an interview with PTI, said the Indian government is preparing a comprehensive package to support Indian exporters affected by a steep 50 percent US tariff. She mentioned that a multi-ministry assessment is currently underway to understand the full impact of these duties on Indian industries.
The US had imposed a 25 percent tariff earlier, followed by another 25 percent starting August 27, making the total duty 50 percent on several Indian exports. These duties are some of the highest in the world, and they were implemented in response to India's continued oil imports from Russia and long-standing trade issues.
Sitharaman said, “We are getting inputs from the affected industries. Something is being worked out to hand-hold the exporters affected by the US tariff.” She added that every ministry is speaking with its stakeholders to determine how much impact the tariffs have had.
Labour-Intensive Sectors Hit Hard
Sectors most affected by the US tariffs include textiles, gems and jewellery, leather, shrimp, animal products, chemicals, and electrical/mechanical machinery. These are mostly labour-intensive industries that rely heavily on exports.
However, pharmaceuticals, energy products, and electronics are not included under these new US duties.
The US is India’s biggest trading partner since 2021-22. In 2024-25, India exported goods worth USD 86.5 billion to the US, and imported USD 45.3 billion, making the total bilateral trade USD 131.8 billion. Around 20 percent of India’s total exports go to the US, making it a key market.
GST Reform to Reduce Prices and Boost Demand
On another key economic front, Sitharaman called the revamp of the GST structure a “people’s reform” that will directly benefit all 140 crore Indians. She said the new tax rates will help reduce the cost of living, increase consumption, and give a boost to the economy.
Starting from September 22 – the first day of Navaratri – the GST structure will change. The 12 percent and 28 percent slabs will be removed, leaving just two main slabs:
- 5 percent for essential goods
- 18 percent for most other items
A 40 percent GST will now only apply to sin goods and ultra-luxury products.
Nearly 400 products will get cheaper, including soap, shampoo, clothes, cars, ACs, tractors, and more. Bread, milk, and paneer will now be completely tax-free. Also, individual life and health insurance premiums will not be taxed, making them more affordable.
Govt Monitoring GST Impact on Prices
Sitharaman said she is personally monitoring whether companies are passing on the GST benefits to consumers. She pointed out that several sectors — from car manufacturers to insurance companies and fashion brands — have already announced price cuts. More price reductions are expected by the time the new GST rates take effect.
“This reform will touch every Indian,” she said. “Even the poorest of the poor buy daily-use items that are impacted by GST.”
The minister emphasised that this is the biggest tax reform since GST was launched in 2017, and every tax rate has been carefully reviewed with the common man in mind.
