NEW DELHI: Indian exporters are closely monitoring the US Trade Representative's investigations and ongoing negotiations for a bilateral trade agreement, which they believe will provide them with a competitive edge over rivals from other countries.
Tariff Proposals and Concerns
While the latest proposal to impose 12.5% tariffs on 54 countries does not alarm Indian exporters significantly, the same levy on China is a major concern. However, many exporters question the findings that suggest India allows goods produced using forced labor. "India has a robust legal framework governing labour standards and is committed to responsible business practices. Any concern can be addressed through constructive dialogue," said Ajai Sahay, Director General of FIEO. "Since India and the US are actively engaged in BTA negotiations, we are confident both sides will work together to strengthen trade ties and arrive at a mutually beneficial outcome," he added.
Sector-Specific Responses
Puran Dawar, Chairman of Dawar Group, an Agra-based leather goods exporter, emphasized: "India's footwear and leather sector is not a forced-labour risk; it is a formal, employment-intensive, women-inclusive and globally audited manufacturing sector. Any additional US tariff will punish compliant Indian MSMEs and workers, while weakening the China+1 sourcing opportunity that American buyers themselves are seeking."
There are also reports of some exporters front-loading shipments to ensure goods reach the US before the current 10% tariff regime ends. "With the current longer route that ships have to take, there is a 10-15-day window available," said an industry source.
Current Market Conditions
For most Indian businesses, conditions have been favorable since the US Supreme Court struck down reciprocal tariffs in late February, and a 10% uniform additional levy was applied to all countries. "We are seeing good demand from the US as there is a level-playing field. If the new tariffs are across the board, we do not have much to worry about as we can manage," said a leading garment player.
Unlike last year, when companies had to offer heavy discounts to sustain business, American buyers are now absorbing the higher costs, which are being passed on to consumers. "Demand is not hit because of the higher prices," added another garment exporter.
Bilateral Trade Deal Hopes
While a bilateral trade deal is viewed positively, most exporters want the Indian government to ensure a comparative advantage over China, Vietnam, and Bangladesh, particularly in traditional sectors such as textiles and footwear.
