Syllabus:
GS-3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment
Context:
The state of Uttar Pradesh has responded to the recent escalation of US tariffs on Indian goods by devising a comprehensive strategy to safeguard its export sector and leverage new opportunities.
More on the News
- The state’s key export hubs carpets, leather, textiles and handicrafts, constitute a significant slice of India’s $86.5 billion U.S. trade.
US Tariff Escalation
- In August 2025, the United States increased tariffs by an additional 25%, raising the total tariff burden on Indian exports to 50%.
- These tariffs affect about two-thirds of Indian exports to the US, worth approximately $86.5 billion in FY25, placing considerable strain on textile, leather, gem, jewellery, and seafood sectors.
- Economic analysts warn that exports to the US could fall to roughly $49.6 billion next year, with Midwest and North India exporters particularly affected.
UP Strategical Response
- Market Development Assistance (MDA):
- The exporters receive up to 75% reimbursement, capped at ₹25 lakh per year, covering trade fair participation, stall costs, airfare, publicity, certifications, and product samples.
- Exports Promotion Policy:
- It provides 30% freight assistance up to ₹30 lakh per exporter annually, including air freight support up to ₹10 lakh.
- The policy offers 30% reimbursement of ECGC premiums up to ₹5 lakh annually, one-time 75% support for e-commerce onboarding fees capped at ₹3 lakh, and 75% reimbursement of postage charges through Dak Ghar Niryat Kendras up to ₹1 lakh per year.
- It introduces performance-linked rewards of 1% on year-on-year incremental export growth, up to ₹20 lakh annually per exporter.
- It supports new export-oriented projects with a 40% capital subsidy, capped at ₹10 crore per project.
- One District One Product (ODOP) scheme:
- ODOP drives growth by promoting unique products from all 75 districts of Uttar Pradesh.
- In FY 2024-25, 1,829 projects worth ₹1.06 crore were approved, enhancing production standards and enabling artisans to access emerging markets like Southeast Asia and Europe.
- Audyogik Aasthan Prabandhan Policy:
- It provides relief to the MSME sector through infrastructure development.
- Nearly 700 acres are being developed as MSME parks, with land allotment facilitated via the GeM portal at ₹2,500 per sq. metre in central U.P. and ₹2,000 per sq. metre in the Bundelkhand region.
- Uttar Pradesh International Trade Show (UPITS)
- The Uttar Pradesh International Trade Show (UPITS) is strengthening exporters’ connections with global buyers.
- Its first edition linked entrepreneurs with buyers from countries like Germany, the UK, and Malaysia, reducing reliance on single markets.
- UPITS 2025 aims for wider participation, greater product showcasing, and deeper global engagement, positioning it as a flagship event for promoting Uttar Pradesh’s exports.
- Infrastructure
- Uttar Pradesh has four international airports and nine domestic airports.
- Once operational, Jewar Airport will offer an initial cargo capacity of 1 lakh tonnes, cutting shipment costs and transit times for goods like handicrafts and agritech products.