US tariffs to raise landed cost of Indian products, says FIEO

The 10 per cent tariff imposed by the US on imports from India will increase the cost of Indian products in the American markets, though the overall impact should be viewed in the proper competitive perspective rather than through the headline tariff alone, according to exporters.

The United States has imposed a 10 per cent tariff on goods imported from India and 16 other countries as part of its efforts to combat the use of forced labour in the production of such items. 

The Federation of Indian Export Organisations (FIEO) has stated that “while the additional 10 per cent Section 301 tariff imposed by the United States on imports from India will increase the landed cost of Indian products, the overall impact should be viewed in the proper competitive perspective rather than through the headline tariff alone”.

SC Ralhan, President, FIEO, said the fact that India has been placed in the lower 10 per cent tariff category, while several competing exporting nations including China, Vietnam, Thailand, Turkiye, UAE, Brazil, South Africa and others face a higher tariff of 12.5 per cent.

This has helped India secure a relatively favourable position compared to many of its global competitors, he said.

Ralhan added that many of India’s direct competitors in labour-intensive sectors such as textiles, garments, leather and footwear, including Bangladesh, Cambodia, Pakistan, Sri Lanka, Indonesia and Malaysia, have also been subjected to the same 10 per cent tariff.

“Consequently, Indian exporters largely retain their relative competitiveness in these sectors, as competing suppliers will face a similar duty incidence in the US market,” he said.

FIEO advised exporters not to draw broad conclusions based solely on the additional 10 per cent tariff but to undertake a product-wise assessment of the applicable US tariff, available exclusions and the tariff treatment of competing supplier countries.