Commercial banks have strengthened measures to deal with the impact of the 50% tariff on India’s exports to the US that will take effect from August 27, ToI reported. They are working on a range of options, including temporary interest concessions, flexible repayment structures and working capital lines to ease cash flow pressures caused by delayed shipments. The steps follow discussions between financial institutions and exporters on the adverse consequences of the proposed tariffs.State-owned Indian Bank is looking at several measures to support affected exporters. “We are engaging with exporters and assessing their working capital needs. Enhanced access to export insurance and credit guarantees and working capital lines tailored for MSME clusters in high-impact zones such as Tirupur and Surat are among the measures taken by our bank to offset the adverse impact. Also, we are considering some interest concessions for a temporary period and waiving some administrative fees such as loan processing charges, forex handling charges and collection fees,” an Indian Bank spokesperson said.

During talks with exporters and manufacturers, the former have shown interest in exploring diversification strategies, including shifting exports to the EU, UK, ASEAN and Africa.

Another public sector bank, Indian Overseas Bank (IOB), is offering advice to exporters and manufacturers on new markets, product diversification, foreign exchange exposures and hedging to protect against currency volatility. Exporters are worried about a potential fall in fresh orders, greater competition in new markets, tighter margins, cancellations of orders or renegotiation of prices. “We have increased sector-specific monitoring for early identification of stress and prompt resolution. Our bank is also keeping a close watch on the Govt of India initiative and align our interventions accordingly,” IOB MD & CEO Ajay Kumar Srivastava told TOI.

A large number of exporters and manufacturers with bank credit have exposure to sectors such as textiles, auto components, gems and jewellery, leather products including footwear and accessories, chemicals and food processing in the US market.

Tamilnad Mercantile Bank (TMB) MD & CEO Salee S Nair said its relationship managers are holding detailed discussions with each customer to assess their exposure, review current contracts and understand the possible effects on order volumes, shipment timelines and working capital requirements. “We are extending flexible repayment structures and, where necessary, enhancing working capital lines to help manage cash flow pressures arising from delayed shipments or margin compression. As of date, TMB’s total export credit post-shipment outstanding stands at Rs 102.8 crore, of which Rs 20.7 crore is linked to the US market,” he added.