US Sec 301 tariffs unlikely to hit India’s exports, textiles need close watch, says FIEO chief
The United States on Thursday announced new tariff brackets of 10 percent and 12.5 percent for many economies under Section 301 action. India has been placed in the lower tariff category of 10 percent.
The Office of the U.S. Trade Representative (USTR) has announced tariffs ranging from 10 percent to 12.5 percent on 60 economies as part of what U.S. President Donald Trump described as inadequate measures to ban imports of goods produced with “forced labor.”
India is among 17 economies that will face lower tariffs of 10 percent, according to USTR. The group also includes the United Kingdom, Canada, Indonesia, Mexico and Bangladesh.
Reacting to the development, Sahai said, “This is not a pleasant development, but at the same time it will not affect our exports. If you look, India is placed in the 10 percent category along with 16 other countries, while many around 38 countries are in the 12.5 percent category.”
He added: “The EU and Taiwan are the exceptions, they are in the sub-10 percent category, but that may include the MFN tariff. And South Korea, Japan, Switzerland, they are in the 12.5 percent country, including the MFN. So overall we had the best deal among these countries. The countries that are not covered by the investigation are not countries with which we have great competition in this field. So we think this will not affect our exports.”
Sahai, however, cautioned that India’s textile industry should closely monitor the proposed tariff rate quota (TRQ) for some rival countries. “But we need to be a little careful, especially in the textile sector, because they have worked on a TRQ in relation to Bangladesh, Cambodia, Indonesia and Malaysia, which may be implemented in the future. So these are areas where we need to see what ultimately comes in the TRQ and whether they will make further concessions,” he said.
India was not included in the textile and garment tariff rate quota (TRQ) exemption offered to Bangladesh, Cambodia, Indonesia and Malaysia for certain exports using US-origin cotton and fibres.
Sahai also noted that products currently covered by Section 232 tariffs will not be affected by the latest announcement.
“Secondly, all products on which tariff is imposed under section 232, including steel, aluminium, auto parts, will not be affected by the tariff. So the impact is limited but of course we will say that this is not a good development because India has already given sufficient evidence that products imported with forced labor are not used into India. The DGFT has recently issued a notification disallowing such imports into the country and we are also a signatory to the international labor organization and forced labor convention.” added.
