Indian Exporters Push for Import Duty Cuts Amid US Tariffs
Indian exporters are urging the government to reduce import duties on select goods from the United States in response to the recently imposed 25% tariff on steel and aluminum imports by the US. The move aims to offset the financial strain on small and medium-sized engineering goods exporters, who are expected to face significant challenges due to the tariff hike.
US Tariffs and Their Impact on Indian Exports
The newly imposed tariffs threaten to disrupt India’s engineering exports to the US, which contribute approximately $20 billion annually. Industry estimates suggest that nearly $7.5 billion worth of exports could be affected, as rising costs make Indian products less competitive in the American market. The Engineering Export Promotion Council (EEPC) has expressed concerns that higher tariffs will reduce export demand and hurt small exporters the most.
Call for Import Duty Reductions
To mitigate the impact, industry representatives are proposing a reduction in import duties on key US-origin raw materials, such as steel scrap, which currently carries a 7.5% duty. Additionally, lower tariffs on essential components like nuts, castings, and forgings could help domestic manufacturers reduce production costs and maintain global competitiveness. Reducing these duties would not only support Indian exporters but also improve trade negotiations with the US, which has previously criticized India’s high tariff barriers.
Government’s Trade Strategy
Amid rising trade tensions, India’s trade ministry has initiated discussions with US officials to explore possible relief measures and ensure fair trade terms. In an effort to ease diplomatic strains, India has already reduced tariffs on select American products, such as high-end motorcycles and bourbon whiskey. Additionally, policymakers are working toward trade agreements with other global partners, including negotiations for a free trade deal with the European Union, to strengthen export opportunities.
Balancing Trade Policies and Domestic Concerns
While lowering import duties could provide relief for exporters, there are concerns that domestic policies, such as proposed safeguard duties on steel imports, may drive up local steel prices, increasing costs for manufacturers. Exporters have urged the government to adopt a balanced approach, ensuring that trade measures protect both domestic industries and India’s export-driven businesses.
Future Outlook
With global trade conditions evolving, India must strategically navigate tariff challenges while safeguarding its exporters. The push for import duty reductions is a critical step toward maintaining India’s position in the international market, ensuring that its engineering and manufacturing sectors remain competitive despite shifting trade policies.
