NEW DELHI/MUMBAI: India is considering new incentives for its exporters amid global trade uncertainty and the potential impact of tariffs threatened by the Donald Trump administration on shipments to the United States, a government official said on Tuesday.
Pressure on Indian exporters is mounting due to aggressive policies being pursued by trade partners like the US and the European Union.
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The government is expected to make a decision on providing incentives to exporters within a month and funding has already been allocated in the budget for the year beginning April 1, the official, speaking on the sidelines of an event, said.
The Indian government did not immediately reply to an email seeking comment.
India’s exports in February were affected by the threat of US tariffs, the official said. India will release trade data for February on March 17.
INDIA’S CENTRAL BANK LIKELY SELLING DOLLARS TO SUPPORT RUPEE
Meanwhile, the Reserve Bank of India (RBI) was likely selling dollars on Tuesday to support the rupee, which was hit by weak global risk appetite and dollar bids due to maturity of positions in the non-deliverable forwards (NDF) market, five traders told Reuters.
The rupee was at 87.2850 against the US dollar as of 11:30 AM India time, up slightly on the day. It fell to 87.3850 earlier in the session.
State-run banks were spotted offering dollars near 87.30 levels, most likely on behalf of the RBI, traders said.
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It “seems like they will be active till the mid-day fixing window, post which it (USD/INR) could move higher”, a trader at a bank said.
Maturity of NDF positions typically heightens demand to buy dollars at the daily reference rate, which exerts pressure on the rupee.
The dollar index was little changed at 103.9 while Asian currencies were mostly lower on Tuesday.