US Tariff Actions: A Potential Threat to Indian Exports
Indian Government Keeps a Close Eye on US Tariff Calculations
The Indian government is vigilantly monitoring the US’s reciprocal tariff calculations, which are due to be announced on Wednesday. This is because President Trump has previously expressed concerns about subsidies provided by certain countries and the Value-Added Tax (VAT) imposed on imported goods.
The government is also analyzing how duties are levied on competing countries, including product-specific actions, to formulate a response.
India’s Efforts to Avoid Retaliatory Action from the Trump Administration
The Indian government has been actively engaging with the Trump administration at both ministerial and official levels, aiming to avoid any retaliatory action. However, US authorities have suggested that exceptions will not be made.
Higher duties on Indian goods, including agricultural products, are anticipated to strengthen the US’s bargaining position during bilateral talks, according to trade experts.
Exporters Worried About Decreased Demand in the Upcoming Months
Many businesses have experienced an increase in exports during March, but reciprocal tariffs are expected to affect shipments until India and the US can resolve their differences. There has been a surge in orders, as fears grow that demand may weaken over the next few months, according to Colin Shah, MD of Kama Jewelry.
“Exports in March have been strong, but we anticipate some disruption for a few months. The situation should improve once India and the US finalize their trade agreement,” Shah added.
India’s Tariff Policy: Balancing Trade Regulation and Domestic Industry Protection
Responding to a Parliament question, commerce and industry minister Piyush Goyal stated on Tuesday: “India’s tariff policy aims to regulate trade, safeguard domestic industries, and generate revenue through taxes on imported and exported goods.”
He further explained that duties on inputs and intermediate goods help boost the competitiveness of manufacturers. “India’s tariff reductions aim to stimulate domestic manufacturing and enhance international trade competitiveness,” Goyal said.
