Commerce Minister To Discuss Trump Tariff With Exporters

India has been slapped with a 26 per cent tariff. Most exports from India to the US are about to be temporarily held back after the April 9 deadline. This is the standard reaction among exporters in many countries that are facing new steep rates of tariffs.

India Should Lead In Defence Of Liberal Trade Regime

Atul K Thakur, Secretary of PHD Chamber of Commerce and Industry (PHDCCI), said, "At this point in time, India should do all possible to strategise its policy advocacy in favour of a liberal trade regime, a cornerstone of the globalised economic integration the world has availed in recent decades".

"Donald Trump's stance on reciprocal tariffs is rightly termed by RBI's Former Governor Raghuram Rajan as a 'self-goal', this is something going to take the rest of the world towards greater economic uncertainties and sluggish growth", said Thakur, who is also a well-known policy professional and an author.

Those who could have already sent as many consignments to the US as possible. For example, Apple has already shipped five planeloads of iPhones and other products from India to the US in late March, according to media reports.

This will avoid new tariffs and will also buy some time for Apple by ensuring steady prices in the American market.

India's customs department has reportedly been asked to expedite and facilitate exports to the US on an emergency basis before April 9.

Commerce Minister To Meet Indian Exporters On April 9

Minister of Commerce and Industry Piyush Goyal is expected to meet representatives of Indian exporters this week, according to sources, on that day itself.

"The upcoming meeting with the exporters (especially to the US) called by the Commerce & Industry Minister will be crucial for assessing the macroeconomic impact of reciprocal tariffs by the new regime in the US on key affected sectors of the Indian economy, including textile, auto components, gems & jewellery, and electronics," Thakur added.

Sources in the Ministry revealed that the Minister is constantly in touch with exporters and various businesses to understand the repercussions and chart a way ahead.

The situation and new policy decisions in the US will be closely followed. For instance, there are talks on possible tax cuts by the US Federal Government to maintain consumer demand across different commodities.

While India is also engaged with the US over completing a bilateral trade agreement (BTA), the Apparel Export Promotion Council of India urged the Indian government to pursue a reciprocal tariff abeyance till the BTA is finalised.

"Expediting the BTA can bring much relief to the Indian exporters, if major concerns are addressed," said Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO).

Atul K Thakur also believes that a lot will depend on a successful negotiation of the bilateral trade agreement with the US that could bring some reprieve on tariffs and fast-tracking trade deals with several other countries.

Indian Exporters Want Relief Measures From Indian Govt

The Indian textile sector is hoping to exploit the relative tariff advantage with close competitors like Vietnam, China and Bangladesh, and sell more Indian garments to the US. However, inflationary pressure in the US may thwart such a possibility.

Sahai said, "How tariffs impact the American domestic economy needs to be seen. If it dampens the consumer demand, then all calculations and estimations will go haywire".

With the situation unfolding fast, this is seen as the right time for the Ministry of Commerce and export promotion councils to get into a huddle — both to gauge the situation and find a less painful way out.

Thakur suggested, "To handhold the MSMEs and linked exporters, the government should offer more support for revival of export incentive schemes such as the interest equalisation (lapsed as of now) and the extension of the Remission of Duties and Taxes on Exported Products (RoDTep) scheme.”

"We'll try to put forward the pending issues like interest equalisation and RoSCTL (Rebate of State and Central Taxes and Levies) schemes in the meeting. Export incentive schemes ideally should be reintroduced and extended, wherever necessary", said Ajay Sahai.

"We'll also try our best to get government help in marketing our products in the US. That has become very crucial under changed circumstances", he added.