RBI to Hold Talks With Industry on U.S. Tariff Impact Ahead of September Policy Review

The Reserve Bank of India (RBI) is preparing to meet industry representatives in September to examine the consequences of the 50% tariffs recently imposed by the United States on Indian exports. The discussions are set ahead of the next Monetary Policy Committee (MPC) meeting, scheduled from 29 September to 1 October, and aim to evaluate sectoral vulnerabilities and potential support measures.

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Labour-Intensive Sectors at Risk

The punitive U.S. tariffs, affecting roughly 55% of India’s $48-billion annual shipments to the U.S., are expected to hit labour-intensive industries the hardest. Textiles, apparel, gems and jewellery, and marine products are particularly vulnerable, facing a pricing disadvantage of 30–35% compared with competitors in China, Vietnam, Cambodia, and other Southeast Asian countries.

Industry insiders report that the impact is already being observed in major production clusters. Surat, Kanpur, and Tiruppur have reported reduced production shifts, delayed shipments, and declining export orders. MSMEs in these sectors are now seeking urgent support to maintain liquidity and working capital, warning that without assistance, operational difficulties may escalate, particularly ahead of the Diwali festive season, when winter apparel exports traditionally peak.

Calls for Policy Support

Exporters and small-scale enterprises have requested several measures from the RBI and government authorities, including:

• A moratorium on principal repayment for one year
• Automatic increase in bank credit limits by 30%
• Collateral-free lending facilities
• Interest equalisation schemes to reduce borrowing costs

According to industry bodies, such interventions are crucial to sustain businesses through the tariff-induced disruption. For example, Indian apparel exports to the U.S., which typically peak at $6–7 billion in FY25 between July and September, have nearly stalled following the tariff announcement.

Linking Trade Strategy and Monetary Policy

Officials also plan to discuss broader trade initiatives during the consultations, particularly the India–U.K. Comprehensive Economic and Trade Agreement (CETA). Once ratified, CETA is expected to open new markets for exporters, helping offset the losses arising from the U.S. tariffs.

RBI’s Commitment

RBI Governor Sanjay Malhotra has reassured stakeholders that the central bank is ready to cushion the economy from the tariffs’ impact. He emphasised that the RBI will continue to support financial stability while promoting growth and noted ongoing efforts to encourage trade in local currencies as part of the rupee’s internationalisation.

Conclusion

By engaging directly with industry stakeholders ahead of its MPC review, the RBI is taking a proactive stance to mitigate the fallout from the U.S. tariffs. Combined with targeted policy support and trade agreements like CETA, these measures aim to shield India’s export sectors while maintaining overall economic stability.