FIEO Says 10% US Tariff on Indian Products Presents New Opportunities for Indian Exporters
New Delhi:
Port Wings News Network:
The Federation of Indian Export Organisations (FIEO) has stated that while the additional 10% Section 301 tariff imposed by the United States on imports from India will increase the landed cost of Indian products, the overall impact should be viewed in the proper competitive perspective rather than through the headline tariff alone.
S C Ralhan, President, FIEO, said that India has not been singled out under the new US measure. “The fact that India has been placed in the lower 10% tariff category, while several competing exporting nations including China, Vietnam, Thailand, Türkiye, UAE, Brazil, South Africa and others face a higher tariff of 12.5%, reflects the recognition by the US of the policy measures taken by the Government of India to strengthen its framework relating to forced labour. This has helped India secure a relatively favourable position compared to many of its global competitors,” he said.
Ralhan further observed that many of India’s direct competitors in labour-intensive sectors such as textiles, garments, leather and footwear—including Bangladesh, Cambodia, Pakistan, Sri Lanka, Indonesia and Malaysia—have also been subjected to the same 10% tariff. Consequently, Indian exporters largely retain their relative competitiveness in these sectors, as competing suppliers will face a similar duty incidence in the US market.
“More importantly, Indian exporters could benefit from trade diversion in several product segments where competing countries are subject to the higher 12.5% tariff. Even a differential of 2.5% can influence sourcing decisions in highly competitive markets, particularly where Indian exporters are able to offer quality products, reliable deliveries and stable supply chains,” he added.
FIEO emphasised that the measure is not a finding against Indian exporters or Indian products, but forms part of a broader country-level US policy applicable to a large number of economies. Several important product categories, including steel, aluminium, auto components, pharmaceuticals, pharmaceutical ingredients, certain agricultural products already covered under Section 232 measures, continue to enjoy exclusions, thereby reducing the impact on a number of export sectors.
Ralhan noted that the Government of India deserves appreciation for proactively strengthening the country’s legal and policy framework on forced labour, which has contributed to India being placed in the lower tariff bracket.
“The Government’s timely policy interventions and continuous engagement with the United States have helped India secure a relatively competitive tariff position vis-à-vis many of its key trading rivals. Going forward, sustained bilateral dialogue will be equally important to secure wider product exclusions, seek treatment comparable with other partner countries, pursue India’s inclusion in any textile tariff-rate quota mechanism and work towards an early review of the tariff,” he said.
FIEO advised exporters not to draw broad conclusions based solely on the additional 10% tariff but to undertake a product-wise assessment of the applicable US tariff, available exclusions and the tariff treatment of competing supplier countries.
Exporters should also strengthen supply-chain compliance, enhance productivity and continue investing in quality, innovation and value addition to leverage emerging opportunities.
“Indian exporters have repeatedly demonstrated resilience in overcoming global disruptions. While the new tariff presents challenges, it also offers opportunities for India to expand its presence in sectors where competing countries now face relatively higher duties. With proactive industry response and continued Government support, Indian exports remain well positioned to sustain their growth in the US market,” Ralhan concluded.
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