India’s state-owned Export-Import (EXIM) Bank is stepping up credit support for exporters and encouraging diversification into newer markets, particularly Africa, after the United States imposed steep tariffs on imports from India, a senior bank official said.
Tarun Sharma, deputy managing director at EXIM Bank of India, said the lender has eased risk limits for at least a quarter of its overseas banking partners to expand access to credit for exporters.
“Wherever there’s a requirement, we are working to see how do we give enhanced limits to the exporters,” Sharma noted in an interview. The bank maintains partnerships with more than 100 overseas banks across 54 countries through its trade assistance program.
EXIM Bank is also providing more shorter-tenure credit options and credit against future receivables to address immediate working capital needs, according to Reuters.
The move comes after the U.S., India’s largest export partner, imposed a 50 percent tariff on Indian exports on August 27.
The tariff hit sectors including textiles, chemicals, gems and jewelry, and fisheries, leading to job losses and disrupted order flows as businesses scrambled to secure buyers in Europe, Africa, and Asia.
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Although the Indian government has not yet announced financial or credit relief for exporters, it has directed banks to ease credit access.
Exporters initially responded by rushing shipments to the U.S. ahead of the August deadline, but Sharma said longer-term strategies involve building a stronger presence in “non-traditional” markets such as Africa and Latin America.
In line with this, EXIM Bank is in discussions with African banks to expand its presence across the continent and support India’s diversification drive.
While the bank currently finances government projects in more than 40 African countries, Sharma explained that the focus is shifting to commercial financing and trade facilitation.
Plans under consideration include extending credit lines of $100 million to $150 million for regional banks or $25 million to $50 million for smaller local lenders. Partnerships are also being expanded with major regional institutions such as the African Export-Import Bank (Afrexim Bank) and the Africa Finance Corporation (AFC).
According to Sharma, Indian exporters grappling with U.S. tariffs have shown “greater receptivity for dialogue and moving ahead to diversify into African markets,” with incremental export opportunities estimated at more than $31 billion.
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Image Credit: Indian Masterminds
