India’s EXIM Bank expands its operations in Africa and increases financing to exporters impacted by US tariffs
India’s Export-Import (EXIM) Bank is enhancing credit support for exporters and assisting them in exploring new markets, especially in Africa, in response to the punitive U.S. tariffs on imports from the South Asian country, according to a senior official.
According to Tarun Sharma, the deputy managing director at EXIM Bank of India, the state-owned EXIM Bank, which offers export financing and supports loans provided by commercial lenders to purchasers of Indian goods, has relaxed risk limits on at least a quarter of its international banking partners.
“We are actively exploring ways to provide increased limits to exporters wherever there is a need,” Sharma stated in an interview. The bank collaborates with over 100 international banks in 54 countries through its trade assistance program.
Sharma stated that EXIM Bank is providing additional shorter-tenure credit and credit against future receivables to meet the immediate working capital requirements of exporters.
On August 27, the U.S., which is India’s largest export partner, implemented a 50% tariff on Indian exports. Businesses in sectors like textiles, chemicals, gems and jewelry, and fisheries, confronted with job cuts and unpredictable order flows, have urgently sought new buyers in markets throughout Europe, Africa, and Asia.
The government has not yet revealed any financial or credit assistance for impacted exporters; however, it has instructed banks to facilitate credit access for the sector.
Initially, exporters managed the tariff shock by frontloading shipments to U.S. clients ahead of the August deadline. Sharma noted that longer-term strategies include transitioning export capabilities to “non-traditional” markets like Africa and Latin America.
Diversifying into Africa
EXIM Bank is engaging in discussions with African banks to enhance its footprint in the region, with the goal of bolstering diversification initiatives.
EXIM Bank is currently financing government projects in more than 40 African countries; however, Sharma indicated that the bank is now redirecting its focus on the continent towards commercial financing and trade facilitation.
The lender is considering credit lines between $100 million and $150 million for regional banks, or $25 million to $50 million for smaller local banks, while also seeking to strengthen partnerships with major lenders in the region, such as the Afrexim Bank (African Export-Import Bank) and the Africa Finance Corporation (AFC). Sharma stated.
Indian exporters, encountering difficulties due to U.S. tariffs, have demonstrated a willingness to engage in discussions and are progressing towards diversifying into African markets, which presents an incremental export opportunity exceeding $31 billion, Sharma stated.
