The Union Cabinet, in a bold step seeking to arrest the declining outbound shipments, on Tuesday endorsed the Export Promotion Mission (EPM), a grandiose export-revival plan that will involve an overall financial outlay of 25,060 crore, as a whole. The programme will assist those industries that are badly hit by the increasing tariff barriers and the changing global trade dynamics.
According to the Mission, senior officials said that it was one of the most ambitious export-support frameworks to be implemented in recent years, an indication that the Centre is increasingly worried about the declining export volumes, the stricter international regulations and how the labour-intensive industries in India were shaping up.
A Reaction to Soaring Tariff Pressures
In the last year, some of its key export-driven industries, namely the textile industry, engineering goods, electronics, as well as some agricultural products, have complained of a severe increase in the cost of inputs and low access to the market by key trading partners who have introduced tariffs.
The Mission EPM intends to give relief to these industries with a specific purpose by supporting them with technologies, updating their quality, assisting them in complying with the laws and regulations, diversifying their markets and developing their infrastructure in ways that are export-oriented.
According to a senior government source, the Cabinet approval was precipitated by an increased vulnerability of the export ecosystem of India owing to external tariff shocks as well as internal logistic constraints, and without remedial action being introduced, India would lose the much-needed market share in areas such as the European Union, Southeast Asia, and West Asia.
Breakdown of the Mission
The 25,060 crore fund will be directed to various elements, which are to be tuned to reach certain bottlenecks that have been identified throughout the export chain.
Key features include:
- Subsidy aid to exporters on tariff-related costs increases.
- Compliance incentives, particularly in those domains related to sustainability, carbon-labelling and mandatory certification, are getting more prevalent in Western markets.
- MSME support that will help them to modernise equipment, use digital tools, and comply with international standards of quality.
- Growth of export areas and logistics belts to expedite clearance, warehousing and port management.
- Market access plans and venture into new destinations in Africa, Latin America and Central Asia.
The authorities explained that the EPM is sector-specific, mission-oriented, unlike the previous schemes that were generic and targeted exports without any specific performance indicators and that the scheme is monitored by a central review committee periodically.
Why the Timing Matters
The Indian exports have been facing headwinds due to global inflation, geopolitical tension and vigorous protectionist policies. Some of the nations have remodelled the duties on goods like steel, textiles, chemical formulations, and electronic equipment.
According to statistics released by the Commerce ministry, the growth in imports and exports has been falling, which has sounded warning bells over unemployment in those states which largely depend on the exportation of merchandise, such as Gujarat, Maharashtra, Tamil Nadu, and Uttar Pradesh.
Researchers feel that the new Mission will be able to stabilise the environment. This 25,060-crore is not just an incentive, but it is a course-correction. A Delhi-based trade analyst suggested it is forward-looking by the government that seeks to avoid the erosion of competitiveness of India’s exports in the long run.
Industry Reactions
The announcement was a welcome move by industry bodies, who termed it a much-needed intervention. The FIEO ( Federation of Indian Export Organisations ) indicated that the Mission would assist Indian exporters to overcome the global compliance obstacles, including CBAM (Carbon Border Adjustment Mechanism) and tough US and EU standards of quality
The MSME exporters, who are usually the least resilient, said that they hoped the Mission would ease their financial load. The increase in tariffs killed our margin. In case the new structure provides practical help, it will create back confidence, said a textile exporter in Tiruppur.
Larger Strategy of the government
The Export Promotion Mission is one of the major pillars of the overall government agenda of integrating India further into the global value chains. It conforms with the efforts being undertaken to promote Free Trade, including PM Gati Shakti, the Production-Linked Incentive (PLI) schemes, the Free Trade Negotiations with the UK, the EU, and the negotiations with Canada.
It was highlighted that the Mission will be designed in such a way that it will introduce long-term stability in the export sector as opposed to temporary alleviation, and it will be aimed at enhancing competitiveness, quality, conformity and expanding the market.
Conclusion
In the global trade environment, where the global trade has become highly unpredictable, the fact that the Cabinet has approved the 25,060-crore Export Promotion Mission demonstrates the urgency with which India needs to protect its export backbone. Rapid implementation and tight cooperation between the Centre, the states and industry stakeholders will determine whether the Mission will be successful.
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