Karnataka Seeks Central Aid, Charts Export Diversification Path Amid US Tariff Shifts
Bengaluru – Karnataka’s government is actively seeking relief measures from the Union Government to shield its exporters from the impact of new tariff impositions by the United States, State Minister for Transport and Muzrai, Ramalinga Reddy, announced on Tuesday. The call to action comes as industry leaders outline a strategic pivot towards new international markets and higher quality standards to maintain competitiveness.
The Minister’s statements were made at the Export Excellence Awards ceremony organized by the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), where the state’s top exporters were honored.
State Leadership Appeals for Federal Support
Minister Reddy underscored the significant challenges emerging from the U.S. tariffs, which target key sectors for Karnataka such as textiles, engineering goods, and IT-enabled services. He expressed confidence that the Centre would intervene with incentives or relief packages and assured that the state government would continue its full support to the exporting community.
“Exports are not just about foreign exchange earnings; they are about job creation, competitiveness, and India’s global positioning. Karnataka is proud of its exporters, and the state government remains a committed partner in their progress,” Reddy stated.
He highlighted Karnataka’s monumental contribution to national export figures, revealing the state recorded exports worth USD 159,019 million in FY 2024–25, securing the top position in India. The state’s economic strengths lie in its robust IT, aerospace, biotechnology, coffee, textiles, and manufacturing sectors.
FKCCI Outlines Strategic Roadmap for Exporters
Echoing the Minister’s concerns, FKCCI President M.G. Balakrishna detailed a comprehensive roadmap for members to navigate the new trade landscape. He characterized the U.S. tariffs as an “unreasonable” and “real threat,” particularly for small and medium-sized enterprises operating on thin margins.
“The imposition of tariffs by the US poses a real threat to the competitiveness of our exporters. This is not just an issue for large companies but particularly for smaller exporters,” Balakrishna cautioned.
The FKCCI’s strategy urges a significant diversification of export destinations to reduce dependency on the American market. Key recommendations include:
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Aligning with European Union standards by obtaining CE certification and sustainability labels.
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Shifting export focus to high-growth economies like Vietnam, Indonesia, and South Korea.
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Leveraging the ‘China+1’ strategy to position India as a stable alternative in global supply chains.
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Capitalizing on Karnataka’s inherent capabilities in the IT-BT, aerospace, and precision engineering sectors.
“Karnataka has also emerged as a hub for startups who are now entering export markets in innovative ways. Truly, our State represents both tradition and modernity in global trade,” Balakrishna added.
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Beyond Trade: Defending State Policies and Infrastructure
Minister Reddy also took the opportunity to defend the state government’s much-debated guarantee schemes. He argued that these initiatives have been economically beneficial, injecting over ₹96,000 crore into the local economy, boosting GST collections, and increasing women’s workforce participation by 23%.
In his capacity as Transport Minister, Reddy emphasized ongoing efforts to modernize the state’s infrastructure. He cited the expansion of highways, development of multimodal logistics parks, and strengthened rail connectivity to ports as critical projects for trade facilitation. He also highlighted the Shakti Scheme, which offers free bus travel for women and has been recognized in the Golden Book of World Records, as a transformative policy that boosts public transport usage and reduces environmental stress.
Celebrating Export Excellence
The event served to honor forty top export companies from across Karnataka for their outstanding performance. The Minister and FKCCI leadership presented awards in numerous categories, including Star Exporter, Best Manufacturer Exporter across micro, small, and medium categories, Best Services and Software Exporter, and multiple zonal-wise district awards.
Prominent winners included Sansera Engineering (Star Exporter Gold), Kemwell Biopharma (ITES Gold), and Presstonic Engineering (Start-up Category Gold). The awards recognized the diverse export base of the state, from traditional sectors like granite and agritech to advanced fields like aerospace materials and pharmaceuticals.
The minister lauded the 109-year legacy of the FKCCI, founded by Bharat Ratna Sir M. Visvesvaraya, calling it a vital bridge between the government and industry. He congratulated the awardees, calling them “ambassadors of Brand Karnataka and Brand India on the global stage.”
