The imposition of a 26 percent tariff by the US on India could significantly affect domestic exporters, according to the FIEO. Despite this challenge, India’s position remains solid compared to competitors like Vietnam and China. The ongoing negotiations for a bilateral trade agreement may alleviate some of the negative impacts. Major export categories indicate robust trade relations, with India holding a notable trade surplus with the US.

India’s Federation of Indian Export Organisations (FIEO) has expressed concerns regarding the 26 percent tariffs imposed by the United States on imports from India. According to Ajay Sahai, the Director General and CEO of FIEO, while these tariffs will impact domestic exporters, India is in a better position compared to other countries like Vietnam, China, and Indonesia, due to lower reciprocal tariffs.

Sahai voiced optimism about the ongoing negotiations for a bilateral trade agreement (BTA) with the US, which could alleviate the impacts of these tariffs. He commented, “We have to assess the impact, but looking at the reciprocal tariffs imposed on other countries, we are in a lower band.”

During the announcement, President Trump highlighted the high tariffs that India has imposed on American goods, stating that they charged 56 percent on imports, including elements of currency manipulation and trade barriers. He referred to India’s tariffs as “very, very tough” while indicating the reciprocal tariffs imposed on the country.

India has maintained a significant trade surplus with the US, amounting to USD 35.32 billion for 2023-24, which is a noticeable increase from previous years. Major exports include drug formulations and biologicals, telecom instruments, and precious stones, whilst imports primarily consist of crude oil and other petroleum products.

Despite the tariff challenges, India’s export performance to the US remains robust, contributing significantly to its economy and trade balance. The outcomes of the BTA negotiations will, therefore, be vital for both countries as they seek to enhance their trade relationship.

In conclusion, the FIEO has articulated concerns regarding the impact of the US’s 26 percent tariff on Indian exports while highlighting India’s competitive position relative to other exporting nations. There is hope for relief through ongoing BTA negotiations, and despite the tariffs, India’s trade surplus with the US indicates robust economic ties. The sectors contributing significantly to export and import dynamics further underscore the importance of mutual trade partnerships.

Original Source: www.ndtv.com

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