SBI report urges India to expand PLI scheme as Trump announces reciprocal tariffs

ANI April 5, 2025 210 views

A new State Bank of India report highlights critical opportunities for India's manufacturing sector amid changing global trade dynamics. The analysis suggests expanding Production-Linked Incentive schemes to boost domestic industries and capitalize on shifting supply chains. With US tariffs creating potential openings in sectors like textiles and engineering, India stands at a strategic trade crossroads. The report recommends proactive policy measures to enhance global competitiveness and negotiate more balanced trade relationships.

"Expand existing Production Linked Incentive (PLI) schemes to cover wider product range" - SBI Report
New Delhi, April 5: According to a report by the State Bank of India (SBI), India should strengthen its Production-Linked Incentive (PLI) schemes in light of growing global trade competitiveness, especially after U.S. President Donald Trump announced reciprocal tariffs on several countries, including India.

Key Points

1

SBI recommends extending PLI scheme across key manufacturing sectors

2

India can leverage US-China trade tensions for export growth

3

Potential to increase market share in textiles and engineering goods

4

Ongoing trade negotiations crucial for tariff balance

The report stated that India has a strong opportunity to benefit from the global shift in trade, especially with the U.S. imposing higher tariffs on Chinese goods.

It recommended that the Indian government expand the current PLI schemes across key sectors like textiles, engineering goods, and gems and jewellery. It suggests widening the coverage of the scheme to include more products and extending its duration by three more years. This would help boost investments in domestic industries and make Indian products more competitive in the global market.

It said, "The Indian government should expand existing Production Linked Incentive (PLI) schemes in these sectors to cover a wider range of products and extend their duration by 3 years, thereby bolstering domestic industries' investment and global competitiveness."

One of the key areas where India stands to gain is in exports to the U.S. With tariffs on Chinese goods going up, India can increase its market share in sectors such as textiles, apparel, and footwear. Additionally, India has manufacturing strength in iron and steel products, which can also benefit from these trade changes.

However, the report also pointed out that the U.S. has imposed a 26 per cent tariff on Indian goods, compared to India's 15 per cent tariff on American products. This imbalance, it says, should be addressed through ongoing trade negotiations between the two countries.

India is reportedly willing to reduce tariffs significantly on over USD 23 billion worth of American goods sold in India as part of the India-U.S. trade deal, which could help in resolving the issue.

The report also mentioned that the reciprocal tariffs being imposed by the U.S. on countries like China, Vietnam, Bangladesh, and Indonesia could give Indian exporters an edge. India may gain from the expected shift in global supply chains, opening up new opportunities for export growth.

Sectors likely to be affected due to the changes in tariffs include textiles, engineering, and gems and jewellery. Indian exporters must stay prepared to tap into the potential gains and strengthen their position in global trade.

Reader Comments

R
Rahul K.
This is a golden opportunity for India! We should definitely expand PLI schemes - our manufacturing sector needs this boost. Textiles and engineering goods can become global leaders if we play our cards right 🇮🇳
P
Priya M.
While I agree with expanding PLI, we need to be careful about reducing tariffs on US goods too quickly. Our domestic industries are still developing and need protection. The 26% vs 15% tariff imbalance is concerning.
A
Amit S.
Finally some good news for Indian exporters! The textile sector has been struggling for years. With China facing higher tariffs, this is our moment to shine. Hope the government acts fast on these recommendations.
N
Neha T.
Interesting analysis, but I wonder if we're putting too many eggs in the US basket. Shouldn't we also focus on diversifying our export markets? The EU and African markets have huge potential too.
S
Sanjay P.
The gems and jewellery sector could be a dark horse here! India already has skilled artisans and lower production costs compared to many countries. With the right incentives, we can dominate this space globally 💎
M
Meera R.
While the PLI expansion sounds good on paper, implementation is key. We've seen many schemes fail due to bureaucracy and red tape. Hope this time the government ensures smooth execution with proper monitoring.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Tags:
SBI Report PLI Scheme Donald Trump India Trade Manufacturing Exports Narendra Modi US-India Trade
You May Like!