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EEPC India urges govt to provide support to absorb part of punitive tariff imposed by US on engineering exports
Sep-15-2025

The Engineering Export Promotion Council (EEPC), India, has urged the government to provide support to absorb a part of the punitive tariff imposed by the US on engineering exports. It also requested the Centre to reinstate the Interest Equalisation Scheme (IES) and ensure affordable export finance. It stated that Indian exporters face a duty disadvantage of nearly 30 per cent compared to competing nations. It said ‘while the industry can absorb 15 per cent of the tariff, we seek government support for the remaining 15 per cent either through scrips or by allowing exchange conversion at the REER rate of exchange.’

EEPC India Chairman Pankaj Chadha stated that the engineering sector was under pressure due to the recent tariff action by the US, and needed urgent support to remain competitive. He said India’s engineering exports to the USA average around $20 billion, which accounts for nearly 45 per cent of the country’s total engineering exports exposed to US tariffs. He said ‘this underscores the vulnerability of our sector and the urgent need for government support’. 

He called for reinstating the IES, particularly for MSMEs or the SME manufacturing units in the engineering sector, and highlighted the difficulties exporters face in accessing collateral-free loans. MSMEs continue to face problems when seeking finance from banks and financial institutions because of high collateral requirements. The credit rating system used by banks further hurts them, leading to higher interest rates and collateral demands. He also suggested that rating agencies should not factor in the US tariff exposure while assessing exporters’ creditworthiness, at least for this year. 


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