The FIEO acknowledges that 26% tariffs imposed by the US will impact Indian exporters, but highlights India’s comparatively stronger position against competitors. Ajay Sahai hopes for a swift conclusion to the bilateral trade agreement to mitigate the effects, as India retains a significant trade surplus with the US.

The Federation of Indian Export Organisations (FIEO) has announced that the 26 percent tariffs imposed by the United States on India will impact local exporters. However, Ajay Sahai, the Director General and CEO of FIEO, stated that India is comparatively better positioned than many countries facing similar tariffs. He expressed optimism about the ongoing negotiations for a bilateral trade agreement (BTA) that may alleviate the adverse effects of these tariffs.

Sahai noted that while Indian exporters will experience challenges due to the tariffs, the impact is comparatively less severe than that on competitors like Vietnam, China, Indonesia, and Myanmar. He emphasized the need for a thorough assessment of the tariffs’ impact, acknowledging the reciprocal tariffs imposed on other nations.

President Trump cited high tariffs from India on American goods as a precursor to announcing the new reciprocal tariffs. During the announcement, he referenced a chart comparing tariffs from various countries, highlighting India’s 56 percent tariffs, which prompted the decision for the US to impose a 26 percent discounted tariff on Indian products.

According to trade data, the United States became India’s largest trading partner from 2021 to 2024, accounting for approximately 18 percent of India’s total goods exports. India maintains a trade surplus with the US of $35.32 billion for the fiscal year 2023-24, which illustrates a significant increase from previous years.

In 2024, India’s primary exports to the US included drug formulations, telecom instruments, precious stones, and petroleum products, among others. Key imports from the US consisted of crude oil, petroleum products, diamonds, and electrical machinery, indicating a diverse trade relationship between the two nations.

In summary, while the recent tariffs from the United States will pose challenges for Indian exporters, the FIEO asserts that India is in a better position compared to other affected countries. With ongoing negotiations for a bilateral trade agreement and significant trade surplus, India’s trade dynamics with the US remain robust despite the imposed tariffs. Continued monitoring and assessment of this situation will be crucial for domestic exporters going forward.

Original Source: www.business-standard.com

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