Indian Engineering Exporters Urge Tariff Cuts Amid U.S. Trade Tensions:

The head of an industry body said that certain small engineering goods exporters for India have requested that the government reduce import tariffs on certain U.S goods to get better trade terms, as premiums are being set on steel and aluminium by President Trump. The president is set to expand restrictions to both US steel and aluminum which includes a 25% tax over both sectors.

The March 12 restriction appears to already be effecting Indian exporters, with declining orders coupled and increasing costs drawing concern from the other side.

Pankaj Chadha, Chairman of the Engineering Export Promotion Council, estimated that around 7.5b worth of China exports would be affected due to the US restrictions. Chadha is a representative of 10 thousand small exporters and says this would affect India's engineering goods exports, which are set at 20 billion dollars annually.

Pankaj Chadha in an interview told imdustry chambers that many are expecting the government to act and relieve tariffs on certain U.S imports that already have low taxes.

Most people expect that if tariffs were lowered, there would be better deals offered by the US making them further solidify a trade proposal with India. This was Trump’s view in his claims of India being a country with an extreme level of tariffs, stating his theory of ‘domestic set tariffs’ from late March.

Piyush Goyal, trade minister of India, is in the U.S for talks on trade relations which includes a discussion on possible tariff reductions. Additionally, he is monitoring the results of Trump's estimated tariff counter proposals.

As an example, India may eliminate the 7.5 percent import duty on steel scrap from the United States and also lower the tariffs on nuts, forgings, and castings while Chadha said using some agricultural and manufactured goods as trade balance.

Exporters remain concerned that India's proposed protective tariff set at 14 percent on steel from outside India, to guard against low-priced steel imports from China, will increase the cost of steel in the country, which would not be beneficial to them.

According to EEPC data, export of engineering goods from India to America in January for the year 2022 had reached $1.62 billion which marked an 18 percent increase from the previous year as compared to the sectors growth of 7.44% owing to the anticipation of tariffs.

For the FY 2024-2025, the first ten months from April to January recorded engineering exports to the United States at $15.6 billion, an increase of 9 percent over the previous year, which is attributed to the rising exports of parts for aircraft, electrical machinery, automobiles, industrial machinery and medical instruments.

According to Chadha, “The engineering sector has its own hurdles and the new U.S. tariffs add to it. Constant government backing in export credit and technology is essential to remain competitive.”

Even though they did not meet the previous month’s total of $10.84 billion, India’s total global engineering exports still increased from $8.77 billion last January to $9.42 billion in December, accounting for a quarter of India’s total merchandise exports. EEPC data indicates cumulative exports during the span of April to January reached $96.75 billion, which reflects a year-on-year increase of 9.82%.