US Tariffs: Piyush Goyal to Confer with Exporters This Week
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Synopsis
Union Commerce Minister Piyush Goyal is set to meet exporters this week to discuss the impact of US reciprocal tariffs on Indian businesses, especially in the pharmaceutical sector and MSMEs. The meeting aims to address fiscal incentives to mitigate trade effects amid growing financial volatility.
Key Takeaways
- Piyush Goyal to meet exporters regarding US tariffs.
- Focus on fiscal incentives for MSMEs.
- Concerns over US tariffs on pharmaceuticals.
- India’s pharma exports to the US reached $8 billion.
- Tariffs on India are lower compared to other Asian nations.
New Delhi, April 6 (NationPress) Considering the reciprocal tariffs imposed by the US and their potential repercussions on Indian enterprises, Union Commerce and Industry Minister Piyush Goyal is anticipated to engage with exporters this week.
As per industry insiders, this meeting is expected to occur on Wednesday, featuring ministry officials and delegates from the Federation of Indian Export Organisations (FIEO) and various export promotion councils (EPCs), alongside other industry representatives.
Exporters, notably MSMEs, are advocating for fiscal incentives to manage the impending effects on their trade following the announcement of 27 percent reciprocal tariffs on Indian goods by the US administration.
The Commerce Ministry is also in ongoing discussions with Indian pharmaceutical exporters due to rising concerns about potential US tariffs on this sector, which was initially exempted in the first round of reciprocal tariffs by former US President Donald Trump. While minor tariffs may not significantly disrupt operations, elevated duties could adversely affect the profit margins of Indian pharmaceutical companies.
In fiscal 2024, India exported $8 billion worth of pharmaceutical products to the US, marking it as the largest export destination, supplying 40 percent of the generics utilized in the US.
India's exports to the US have been on a downward trajectory since FY23, with their share in total exports hovering around 17-18 percent. The top 15 commodities exported to the US constituted 63 percent of total exports, as reported by SBI Research. The overall impact on the Indian economy is likely to stem more from a global economic slowdown and increased financial volatility due to worldwide tariff hikes, the report noted.
Interestingly, the tariffs imposed on India are the lowest among its Asian counterparts, with China facing a 34 percent tariff, Thailand 36 percent, Indonesia 32 percent, and Vietnam 46 percent.
This disparity is expected to provide India with a competitive edge over these nations, potentially boosting exports in certain sectors in the long run, according to the SBI report.
The PHD Chamber of Commerce and Industry (PHDCCI) has indicated that due to India's price competitiveness and favorable government initiatives, it expects the GDP to experience only a marginal 0.1 percent impact as a result of the recently announced US reciprocal tariffs.
