Priyanka Tiwari
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India’s top exporters’ association, the Federation of Indian Export Organisations (FIEO), acknowledged on Thursday that the recently announced 26% US tariffs on Indian goods will impact domestic exporters. However, they emphasized that India is in a stronger position than many global competitors.
Ajay Sahai, FIEO’s Director General and CEO, said that although the tariffs will affect exporters, India remains less exposed than countries like China, Vietnam, and Indonesia. He added that the ongoing talks for a bilateral trade agreement between India and the US are critical to countering these tariffs.
India Faces Tariffs, But Situation Better Than Others
Sahai noted that while the 26% duty will cause disruptions, the country is placed in a lower risk category when compared with others. “We’re better placed than our key competitors such as Vietnam, China, Indonesia, and Myanmar. The impact is real, but relatively less severe,” he told PTI.
FIEO President S C Ralhan highlighted that Vietnam faces a 46% tariff, China 34%, and Indonesia 32%, making India’s position comparatively favorable. He stressed the importance of concluding a bilateral trade deal to resolve tariff-related concerns effectively.
US Justifies Tariffs as Reciprocal Measures
The US President introduced the new tariffs by claiming they match the high import duties other countries impose on American products. During the announcement, he referenced a chart showing how much India and other nations charge in tariffs, and detailed the “discounted reciprocal tariff” of 26% for India.
The chart suggested India levies 56% tariffs on American goods, including factors such as currency manipulation and trade barriers. “India, very, very tough,” the President commented, adding that despite a friendly relationship with the Indian Prime Minister, trade fairness must be upheld.
India-US Trade Snapshot
From 2021–22 to 2023–24, the US was India’s largest trading partner. The US contributed to about 18% of India’s total goods exports and accounted for 6.22% of imports. In 2023–24, India recorded a $35.32 billion goods trade surplus with the US.
Key Indian exports to the US in 2024 included:
Drug formulations and biologicals: $8.1 billion
Telecom instruments: $6.5 billion
Precious and semi-precious stones: $5.3 billion
Petroleum products: $4.1 billion
Jewellery and garments: $6 billion combined
Main imports from the US were:
Crude oil: $4.5 billion
Petroleum products: $3.6 billion
Coal and coke: $3.4 billion
Diamonds and gold: $3.9 billion combined
Electric machinery and aerospace items: $2.7 billion
Call for Trade Agreement to Ease Tariff Impact
FIEO continues to urge quick finalization of the bilateral trade agreement with the US. According to Ralhan, such a pact can establish a framework for fair trade, limit retaliatory measures, and support Indian exporters in maintaining global competitiveness.
