US tariffs: India readies steps to protect exporters; domestic demand push in focus, says economic affairs secretary

The government is preparing measures to cushion industries and workers from the fallout of the United States’ steep tariff increase on exports, according to Economic Affairs Secretary Anuradha Thakur. "There are certain employment-heavy sectors which do have exposure to the US and to that extent may get affected. The government is well aware of that and is assessing the possible impact and working towards possible solutions," said Thakur in an interview with PTI. Thakur indicated that steps have already been taken, with more measures in the pipeline to support domestic demand and help manufacturing units hit by the tariff shock. She also pointed to broader reforms in play, including the Union Budget’s decision to exempt income up to Rs 12 lakh from tax and upcoming GST rationalisation aimed at lowering commodity prices. Strong monsoon conditions, she added, are expected to boost agricultural output and rural consumption. On fiscal management, Thakur expressed confidence in achieving the Centre’s 2025-26 fiscal deficit target of 4.4 per cent of GDP, equivalent to Rs 15.69 lakh crore, despite recent slippages. By end-July, the deficit had touched 29.9 per cent of the full-year estimate, compared to 17.2 per cent in the same period last year. "So this question (of achieving the target) has been coming up because of the latest numbers. I would like to say that quarter-by-quarter or month-by-month assessments of fiscal deficit numbers may not give a correct picture because of temporal mismatches, which may come in on the receipt and expenditure side. On the overall fiscal deficit numbers, our assessment so far is that we will be able to achieve the target," she said. Thakur underlined India’s "strong macroeconomic fundamentals," pointing to steady private consumption and robust public and private capex. "Government capex has been a big factor in holding up our numbers so far and not only on the fiscal deficit side but the growth numbers also remain robust as of now," she noted. She said the economy’s 7.8 per cent growth in the April-June quarter — its fastest pace in five quarters — reflected broad-based expansion. "Q1 numbers reflect the basic resilience of our economy. It reflects strengthening of the momentum in the economy and it is anchored in strong macroeconomic fundamentals," she said. Looking ahead, she added, "We feel that the basic features or factors which have held us in good stead in Q1 are good performance of manufacturing, construction and service sectors and strong growth on the agriculture side, as well as domestic demand factors that have bolstered growth numbers."The secretary's statement comes a day after reports revealed that the commerce ministry is drawing up a comprehensive short-, medium- and long-term plan to shield Indian exporters from the impact of the steep 50 per cent US tariffs on Indian goods. Immediate measures under consideration include easing liquidity pressures, giving special economic zone (SEZ) units more flexibility, and promoting targeted import substitution to prevent insolvencies and job losses, PTI reported citing an official.Also read: Ministry drafts multi-tier plan to shield Indian exporters; check key measures outlined India’s 7.8 per cent growth rate outpaced China’s 5.2 per cent in the same quarter, reinforcing its position as the world’s fastest-growing major economy.