Export subsidies are financial incentives provided by governments to domestic producers of goods and services to encourage them to export their products to foreign markets. These subsidies can take various forms, including direct cash payments, tax breaks, and discounted loans.

The main purpose of export subsidies is to make domestic products more competitive in the international market by reducing their production costs. This, in turn, can lead to increased exports, which can help boost the domestic economy and create jobs.

However, export subsidies can also have negative effects. They can distort trade by giving an unfair advantage to domestic producers over foreign competitors. This can lead to trade disputes and retaliation from other countries, which can harm international relations and reduce overall economic growth.

In recent years, many countries have reduced or eliminated their export subsidies as part of efforts to promote fair and open trade. However, some countries still use export subsidies as a tool to support their domestic industries and promote exports.