New Delhi, Sept. 19 -- The new US law empowering President Donald Trump to impose tariffs of up to 100 per cent on Indian goods is a major concern as it is creating uncertainty over the otherwise healthy trade relations between the two countries, and such duties, if imposed, could severely disrupt India's exports to America, according to exporters. However, the likely impact on Indian exports can be assessed only after Washington announces the tariff rate, product coverage and implementation schedule.
They added that the Russia-Ukraine war and West Asia crisis have already pushed up raw material prices and transportation costs. Trump on September 18 signed the Sanctioning Russia and Iran Act, which may impose steep levies on Moscow and its top energy buyers. The Act authorises President Trump to impose tariffs of up to 100 per cent on countries buying Russian oil and gas, including China and India. The law comes into effect within 30 days of signing by the President and requires him to impose duties of up to 100 per cent on goods imported from countries that are the top five purchasers of Russian crude oil or natural gas by total volume during the 12 months preceding enactment.
"We are very worried and concerned. If the US imposes high tariffs, it will completely halt our exports to the US. No importer can afford this high level of tariffs," Federation of Indian Export Organisations (FIEO) President SC Ralhan said. He said many engineering sector exporters have significant businesses in America and the US should factor in these aspects before taking any decision on new duties. Sharing similar views, Mumbai-based exporter and CMD of Technocraft Industries Sharad Saraf said that more than tariffs, the uncertain environment impacts more.
"The clear impact can be assessed only after we have the details. We also have to see how much duty will be imposed on our competitor nations like China. We are quite worried about the new law because it is creating a lot of uncertainty in the otherwise healthy trade relations. We are not able to take decisions," Saraf said. He said the move could be a pressure tactic on countries like India by the Trump administration ahead of the US midterm elections in November. Import duty makes goods expensive in the importing country. Besides, a few other factors also play a role in this. For example, duties on India's competitor nations such as Bangladesh, Vietnam and Thailand, and the quality and standards of items.
Trade Promotion Council of India (TPCI) Chairman Mohit Singla said that the US move is a cause of "major worry" for Indian exporters. "If imposed, it can severely impact certain sectors. It can create disruptions in the business relations of the two countries," Singla said. Another exporter with major exposure to the US market said the American authorities should recognise that the world is a globally integrated village and that countries need each other. He said any policy decision should ensure that the balance of trade is not disrupted.
Published by HT Digital Content Services with permission from Millennium Post.