India has emerged a “winner” in the recent US tariff hikes, as its exporters are better positioned to absorb the impact compared to competitor countries that are facing higher import duties in America, sources said on Saturday.
They added that sectors that could get impacted like marine need to explore new markets such as the European Union to push their shipments.
India has protected its dairy sector in all the free trade agreements and it will continue to do so and safeguard them, they said, adding that if the US goes ahead with imposing higher tariffs on pharmaceuticals also, it will have a small impact on India.
“India has emerged as a winner in the reciprocal tariffs imposed by the US. India has the first mover advantage as it is negotiating a bilateral trade agreement with America,” one of the sources said.
In a trade pact, two countries either significantly reduce or eliminate import duties on the maximum number of goods traded between them.
So in this case, both nations could look at cutting taxes for each other. While the US has imposed an additional 26 per cent import duty on India, its competitor Vietnam is facing 46 per cent tariff, Bangladesh 37 per cent, China 34 per cent, Indonesia 32 per cent, and Thailand 36
per cent.
On top of 34 per cent, imports from China to the US face previously announced 20 per cent tariffs. Now as China has retaliated to reciprocal tariffs, President Donald Trump is expected to increase duties further as he had announced.
The commerce ministry is reaching out to domestic exporters regarding these tariffs. Work is progressing to prepare the export promotion mission for extending support measures to exporters.
The US-China trade war will also prove huge opportunities to Indian exporters to increase their shipments. “The government is there to protect domestic industry from any possibility of dumping of goods in such a situation,” they said.
According to reports, US President Donald Trump has said tariffs on pharmaceuticals and semiconductors will be announced shortly, emphasising that the measures on pharmaceutical imports will be unprecedented. On the April 3 announcements, the US has exempted these two sectors among a few others
from duties.
President Trump has said tariffs on pharmaceuticals and semiconductors will be announced shortly, emphasising that the measures on pharmaceutical imports will be unprecedented.
The commerce ministry is holding dialogues with exporters and is working with them to deal with the issue as many are saying that their sector would not be impacted much from these taxes as their competitors have more duties.
“We have to be patient. Trade agreements do not happen overnight. It is a careful and steady process. Things are analysed carefully,” the source said, adding that a slight impact on demand in the US could be a little challenging. About the demand slowdown in the US due to hike in tariffs, they said the slowdown is unlikely to be significant, as the US President has promised tax cuts, which will increase disposable income; energy costs are down and the “delta” between their import price and retail prices for most products remains high. One of the products where the tariff hit could be more is shrimps as the competitor country Ecuador is facing just 10 per cent duty.
The EU has started faster India’s quality control orders will enable faster listing of Indian fisheries firms and it will help in increasing exports to Europe. India’ shrimp exports to the US stood at $2.4 billion.
