Center -skrel to renovate the export plan as US rates hit India, Guns Asean

Copyright © HT Digital Streams Limit all rights reserved. The new plan involves the diversification in markets such as the UK, with which India recently signed a free trade agreement (FTA), and the European Union (EU), where negotiations are in the last phase and an agreement can be signed before the end of the year, officials said on condition of anonymity. (Bloomberg) Summary of India’s plan will also focus on sector -specific challenges and policy measures to support exports, including investigating new markets using Indian missions abroad. New -Delhi: The center has been confronted with steep rates imposed by the US government, and it is complying with export promotion boards and manufacturers to find a way to rework the country’s export strategy, two government officials are aware of the development. The development is in fact stalemate in the negotiations of bilateral trade agreement (BTA) between India and the US, with which the two countries have struggled since June, as reported by Mint on June 11. The new plan involves the diversification of markets such as the United Kingdom, with which India recently signed a free trade agreement (FTA), and the European Union (EU), where negotiations are in the last phase and an agreement can be signed before the end of the year, the officials above quoted the condition of anonymity. India’s plan will also focus on sector -specific challenges and policy measures to support exports, including investigating new markets using Indian missions abroad, officials said. Among other things, the government sees a strong export potential in regions such as Saudi Arabia, France, Vietnam, the Netherlands, Mexico and Ethiopia. The review will also focus on India’s growing competition gap with Bangladesh and with Asean countries such as Vietnam and Indonesia, which received significant tariff relief under the latest US executive order. While India has a 25% duty – only 1 percentage point of 26% in the April 2 notice – Vietnam rates were reduced from 46% to 20%, from 32% to 19%, and Bangladesh’s from 37% to 20%, giving these exporters a clear benefit in the US market. Sectoral discussions will pay particular attention to cases such as Vietnam, which imports Indian shrimp, process it and export it under a more favorable tariff to the US, and Indonesia, who enjoy a lower duty on electronic exports, “said one of the officials. “Bangladesh, a large exporter of garments, now benefits from a lower 20% rate compared to the 25% charged on Indian textiles.” The meetings will also investigate the implications of the new US rules on transition, which are imposed on a criminal tax on the goods that are redirected to evade rates, this person said. Inquiries sent to the Ministry of Trade, which are the forefront of the consultations with the industry, remained unanswered until per tense. The rates explained on Thursday that the US was imposed on the value of all goods sent from India on August 7. Certainly, Indian goods will also attract existing MFN (most beneficiary nation) duties, which are on average 3% but differ over sectors. Goods that are already on their way to the US and will reach ports before October 5, will have to pay 10%. Furthermore, certain sectors are exempt from the new rate of 25%, but they still have to pay the MFN duty. “From now, exports worth approximately $ 30 billion – consisting of sectors such as petrochemicals ($ 4 billion), pharmaceuticals ($ 15 billion) and electronic goods ($ 11 billion) – are not affected as it is exempt from the additional duty,” the first among the two officials mentioned above. The first official added that sectors that are worrying are textiles (exports worth $ 10.91 billion), engineering goods ($ 19.16 billion), agriculture ($ 2.53 billion), jewelery and jewelry ($ 9.94 billion), ($ 948.47 million), marine products ($ 2.68 billion) and plastic ($ 1.92 billion). In FY25, India exported goods worth $ 86.5 billion to the US, which is 20% of the country’s total trade export of $ 433.56 billion in FY25. Industrial Reactions According to the Global Trade Research Initiative (GTRI), a Delhi-based thinking tank, India’s exports to goods to the US could drop by 30% by 30% to $ 60.6 billion in FY2026. “This order is more than just a tariff measure-that’s a pressure tactic,” said Gtri founder Ajay Srivastava, adding that the US used access to its markets through rates as leverage to promote its geopolitical goals and extract unilateral trading installations. “Countries like China have retained exemptions on critical goods such as pharmaceutical products, semiconductors and energy. But India was singled out for the more difficult treatment, without product level exemptions,” Srivastava added. Rates on China have not been revised under the latest order and will continue at 30%. Vipul Shah, former chairman of the Gem & Jewelery Export Promotion Council (GJEPC), said the government should consider encouraging exporters, especially those who are very dependent on the US market, as the new rates are an important blow to sectors such as gems and jewelry. “Immediate support is crucial to helping these industries navigate the shock,” he said. However, Ashwani Mahajan of the Swadeshi Jagran Manch, who oppose a unilateral trade agreement, said India should not be too concerned about higher US rates, as the country is not as exports as China. “Work is already underway to diversify and explore new markets,” he said. Mithileshwar Thakur, secretary of General of the Apparel Export Promotion Council (AEPC), said the Indian clothing industry has an exposure of about 33% to the US market. He added that the FTA with the UK and continued FTA negotiations with the EU together could provide great opportunities for the Indian clothing industry, and that it partly counteracted the losses in the US business. But in order to tide the current crisis, the government must provide incentive to the export community on the immediate term to stay in the US market across the floor. “It’s a shame that India was hit with the highest rates. It will certainly affect our competitiveness. We are in a guard-and-watch mode to see if prices in the US market are rising and whether US buyers can absorb the increased cost or not,” says Pankaj Chadha, chairman of the Engineering Export Council (EEPC). The government is investigating newer engineering goods markets and focusing on expanding exports to new target markets such as Sao Tome, Macao, Georgia, Croatia, Guinea-Bissau, Belize, Azerbaijan, Myanmar, Lithuania, Norway, Somalia and Greece. Currently, the most important export destinations for Indian engineering goods are the US, UAE, Saudi Arabia, Germany and Italy. The Netherlands, South Korea, Belgium, Mexico, Japan and Kuwait are also seen as promising markets. For pharmaceutical products, there are new destinations identified, Montenegro, Southern Sudan, Chad, Comoros, Brunei, Latvia, Ireland, Sweden, Haiti and Ethiopia, while Greece is listed as a promising market. Traditional export markets for Indian medicine are – USA, UK, the Netherlands, South Africa and Brazil. In electronics, the government has Sao Tome, Montenegro, Cayman Islands, St. Vincent, Mongolia, El Salvador, Turkmenistan, Honduras, Bahrain, Somalia, Puerto Rico, Vietnam and Sweden listed as new export destinations. Russia, Mexico and Turkey are marked as promising markets. For agricultural and processed food products, the focus on Nigeria, Switzerland, Lithuania, Slovenia, Mexico, Sweden, Portugal, Cameroon, Djibouti, Latvia, Egypt, Senegal, Canada, Argentina and Brazil. Catch all the politics news and updates on live currency. Download the Mint News app to get daily market updates and live business news. More Topics #Export #Exports Read Next Story