India-US tariff war: Exporters told to brace for competition

New Delhi: The government has asked exporters to prepare for higher competition amid an impending threat of reciprocal tariffs to be imposed by US President Donald Trump’s administration.

Commerce and Industry Minister Piyush Goyal held a stakeholder consultation meeting with representatives of export promotion councils and industry associations on Thursday. Commerce Secretary Sunil Barthwal, Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi and other senior officials of trade departments participated in the meeting held virtually.

“The minister said that we should not be over protective because this is the world of reciprocity and we should try and engage,” said an industry representative, who participated in the deliberations.

The industry representative, who did not want to be named, said during the meeting Goyal expressed concern over sluggish exports in recent months and asked exporters to ramp up efforts to ensure the value of shipments during the current financial year does fall short of the last year’s value.

In a post on X, Goyal said he held the stakeholder consultation meeting to “discuss strategies for strengthening India’s export ecosystem”.

“The optimism among our industry stakeholders in transforming global challenges into opportunities is truly encouraging. With an evolving global trade landscape, we explored ways to expand into new markets and strengthen competitiveness to drive India’s export growth,” he said.

The cumulative value of India’s goods exports during April-January period of the current financial year stood at $358.91 billion, which was 1.39 per cent higher when compared with the same period in the previous year. India’s goods imports during this period jumped by 7.4% to $601.90 billion, leading to higher trade deficit, as per the latest official data.

In January, the value of merchandise exports declined on a year-on-year as well as on a month-on-month basis. The situation is likely to be worse in February as Trump’s tariff threats likely hurt India’s shipments.

The US is India’s largest importer. India’s exports to the US in 2023-24 stood at $77.52 billion, which was 17.74 per cent of the country’s total merchandise exports during the year. The US is among a few countries with which India has a positive trade balance. Trump seeks to alter the trade dynamics by imposing higher tariffs.

Amid the impending tariff threats, the government has asked traders to increase imports from the US.

“The Commerce Secretary asked us to identify areas where we can source from the US rather than China and other countries,” said another source who attended the meeting.