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New Delhi: After giving relief to the common people by approving a major revamp of the Goods and Services Tax (GST) structure, the Central government is preparing to provide some respite to the exporters bearing the brunt of the US tariffs. The major GST reforms were announced by Finance Minister Nirmala Sitharaman on Wednesday, amid growing concerns over the punitive 50 per cent tariff imposed by US President Donald Trump on Indian goods.
The GST reforms marks the simplification of the tax structure, shifting to a two-slab system of 5% and 18%, doing away with the earlier 12% and 28% rates. The sweeping rate reductions across sectors will bring much-needed relief to on common man, labour-intensive industries, farmers and agriculture, health, key drivers of the economy.
According to government sources, some support measures are now being looked into with an aim to provide relief to the sectors hit by the US tariff and a slew of schemes can also be announced soon to help the exporters adversely affected by the tariff hike.
Several key sectors hit by US tariff
Last month, the Trump administration imposed 25 per cent reciprocal tariff on India and subsequently doubled the levy to 50 per cent by slapping 25 per cent additional duty for New Delhi's continued purchase of Russian oil.
Trump's tariff move has hit several key industrial sectors including, textiles, apparel, jewellery and ornaments. Exporters associated with leather and footwear, agriculture, chemical and engineering products and marine export sectors are also at the receiving end of the Trump's action and facing fresh challenges in the global markets.
What relief measures can be announced by Modi govt
The schemes that are expected to be proposed by the government as relief measures will focus on addressing liquidity constraints faced by small exporters, easing pressure on working capital, and ensuring uninterrupted production while new markets are explored, the sources said.
Additionally, efforts will also be made to ensure that the jobs of the people working in these vulnerable export-linked sectors are secured and exporters do not face any difficulty in continuing their production till they find new markets for their products. The government is already working on an incentive package similar to the one extended to the MSME sector during the COVID-19 pandemic, the added.
Besides, the Central government is also working on functioning of the Export Promotion Mission which was announced in the Union budget, aimed at boosting India's global trade footprint.
