New Delhi [India]: A recent report by the State Bank of India (SBI) has emphasized the need for India to enhance and expand its Production-Linked Incentive (PLI) schemes, in response to growing global trade competitiveness. This recommendation comes particularly in light of U.S. President Donald Trump’s announcement of reciprocal tariffs on multiple countries, including India.
The report points to a global shift in trade patterns, with the United States levying higher tariffs on Chinese imports, presenting an opportunity for India to step in and strengthen its export footprint.
It highlighted that expanding the scope of the current PLI schemes to more sectors and products—especially in textiles, engineering goods, and gems and jewellery—would be a strategic move. The report further proposes extending the scheme’s timeline by an additional three years to encourage more domestic investment and enhance India’s competitiveness on the world stage.
“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,” the report stated.
A significant opportunity lies in boosting exports to the United States, especially in categories where tariffs on Chinese goods have increased. Sectors such as textiles, apparel, and footwear stand to gain market share, alongside Indian-made iron and steel products, which already have a strong manufacturing base.
However, the report raised concerns about the existing tariff imbalance between the two countries. While the U.S. currently imposes a 26% tariff on Indian products, India charges only a 15% tariff on American imports. The report suggests this disparity should be a priority in ongoing bilateral trade discussions.
India is reportedly considering a reduction in tariffs on more than USD 23 billion worth of American goods as part of an anticipated trade agreement. This move could help level the playing field and resolve lingering trade issues with the U.S.
The report also noted that reciprocal tariffs being applied by the U.S. to other countries like China, Vietnam, Bangladesh, and Indonesia could create a strategic opening for Indian exporters to capture a greater share of global trade.
Sectors such as textiles, engineering goods, and gems and jewellery are expected to be directly impacted by these changes. The report advises Indian exporters to stay proactive, ready to seize new opportunities arising from shifting global supply chains and trade realignments.