Saralnama
Indian banks are exercising increased caution in sanctioning fresh loans to exporters heavily dependent on US markets following the US government's imposition of tariffs on Indian goods. The US has implemented a 25% tariff effective August 7, 2025, with an additional 25% duty scheduled from August 27, raising the total tariff to 50%. Banks are assessing their exposure by analyzing exporters' turnover and the potential impact of tariffs on their exports. While current repayment trends remain stable and clients continue to utilize sanctioned loan limits, lenders are cautious about approving new loans, focusing on existing projects and sector-specific risks. Sectors such as textiles, chemicals, pharmaceuticals, electronics, gems, and jewellery are expected to be more affected if tariffs proceed without concessions. Larger exporters might shift to other markets, but concerns remain about the impact on jobs and GDP growth due to the US market's significance. Some expect government subsidies to support small exporters to mitigate job losses. As of June 27, 2025, banks’ outstanding export credit stood at ₹13,047 crore, an 11% increase year-on-year, according to RBI data. (Updated 21 Aug 2025, 19:29 IST; source: link)