50% tariff shock, threat looms over Indian exports
The 25 per cent additional duty imposed on India by former US President Donald Trump came into effect from Wednesday. With this, the total tariff on India has reached 50 per cent – one of the highest tariffs imposed on any country. The most severe impact of this decision is on India’s textile and seafood export industry.
Deep crisis in textile industry
There have been reports of production being stopped in India’s major textile production centers – Tirupur, Noida and Surat. Federation of Indian Export Organisations (FIEO) president SC Ralhan said that due to rising costs and global competition, Indian producers are lagging behind countries like Vietnam and Bangladesh.
“50 per cent tariff is eliminating the competitiveness of Indian goods in a large export market like the US,” – SC Ralhan
Impact on seafood exports too
About 40 per cent of Indian seafood, especially shrimp, is exported to the US. In such a situation, the increase in tariff is likely to have a serious impact on storage, supply chain and farmers’ income.
India is lagging behind in global competition
Ralhan also said that Indian goods have now become costlier than those of China, Vietnam, Cambodia, Philippines and other South Asian countries, making them uncompetitive in the global market.
Textile industry hopes for relief
Confederation of Indian Textile Industry (CITI) President Rakesh Mehra said that the government is expected to provide financial support and quick decisions at the policy level. The industry needs availability of raw materials and export incentives to overcome this crisis.
“The industry expects strong support from the government in this difficult time,” – Rakesh Mehra
India-US talks: Looking for solutions
Meanwhile, senior officials from India and the US have discussed issues such as trade, investment, energy security and civil nuclear cooperation. The talks, held under the ‘two plus two’ inter-sessional dialogue, took place against the backdrop of tensions caused by the Trump administration’s tariff policies.
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