India Pledges Action Amidst US Tariff Threat
Government Consults Exporters on Mitigating Trump’s Trade Measures
New Delhi is strategizing its response after President Trump announced a 25% tariff on Indian goods, aiming to support beleaguered exporters and explore new global markets.
Seeking Solutions and Market Diversification
In immediate consultations led by Rajesh Agarwal, special secretary in the commerce department, exporters urged the government to implement supportive measures that would also bolster market confidence. Suggestions included addressing “low-hanging fruit” that could provide quick relief.
A senior government official indicated that reforms for special economic zones are being expedited. This initiative aims to assist exporters by simplifying domestic sales and potentially boosting capacity utilization.
Export Mission and Financial Support
Exporters also proposed the swift operationalization of an export promotion mission, initially announced in the Budget. During discussions with Commerce and Industry Minister Piyush Goyal, aspects like marketing assistance and strategies for handling trade actions were reviewed. The department hopes to increase the current financial year’s allocation for this mission, which stands at over Rs 4,000 crore.
To navigate the anticipated short-term impact on orders and potential cash flow challenges, several executives emphasized the need for interest subsidies. Additionally, faster processing of duty drawback claims and GST refunds was highlighted as crucial for ensuring adequate exporter liquidity.
As of August 2019, India’s share in the US market was approximately 1.9% of total US imports, indicating significant potential impact from new tariffs. (Source: U.S. International Trade Administration). The government acknowledged the need for clarity on the specific “penalty” proposed by Trump.
Hoping for Bilateral Trade Agreement Progress
Businesses are advocating for an early bilateral trade agreement with the United States to minimize market disruptions. Exporters are anticipating positive developments during the upcoming round of talks, scheduled to commence on August 25.
