US President Donald Trump’s tariff threats seem to have some effect on India’s Union Budget of 2025-2026. Finance Minister Nirmala Sitharaman presented her 8th consecutive budget and created a history of her kind. During the speech, Sitharaman mentioned that India remains the fastest growing economy compared to all the major economies of the world. An important aspect of the budget was that such measures were proposed in it which focused on strengthening the Indian economy amidst the ongoing uncertainties around the world. After winning the US presidential election of 2024, Trump is threatening to put tariffs on several countries and international groups.
Trump has often threatened high tariffs against BRICS countries, including India. New Delhi is trying to reduce tariffs on goods to protect itself from Trump’s threats. Asked whether Trump’s warnings had any effect on the budget, especially in the Income Tax Slab, Sitharaman made it clear that the voice of the people is the priority of the budget.
Export promotion mission
The government on Saturday announced the establishment of an export promotion mission with a outlay of Rs 2,250 crore to increase exports. This mission will be jointly operated by Commerce, MSME and Finance Ministries. In the budget of 2025, Sitharaman proposed the Export Promotion Mission, which will be jointly operated by the Ministry of Commerce, MSME and Finance. The objective of this initiative is to provide export loans, border-cross factoring support and Easy access to MSMEs to deal with non-tariff measures in foreign markets. This mission will not only provide assistance to the manufacturing sector but will also encourage them to expand its presence in the international market. Budget announcements will help promote domestic manufacturing and exports in areas such as textile, sea, toys and leather.
Custom tariff relaxation
As a part of a comprehensive review of the customs rate structure announced in the budget of July 2024, Sitharaman proposed to remove seven tariff rates. He said that after this, only eight tariff rates including zero rate will be left. Trump has often complained that India’s import duty is very high. Prior to meeting Prime Minister Narendra Modi in 2019, Trump complained about high import duty on prestigious Harley-Davidson motorcycles.
