U.S. tariffs take effect on India, threatening $48.2B in exports : NPR

The workers of a manufacturing unit make leather shoes in Agra, India on Monday.

Manish Swarup / AP

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Manish Swarup / AP

NEW DELHI – US increasing prices on a range of Indian products entered Wednesday, threatening a steep blow for India trade abroad on its largest export market.

President Donald Trump initially announced a 25% rate on Indian products. But earlier this month, he signed an executive decree imposing an additional rate of 25% due to Indian Russian oil purchases, bringing the combined prices imposed by the United States on its ally at 50%.

The Indian government estimates that prices will have an impact on $ 48.2 billion in exports. Officials have warned that new tasks could send shipping in the United States in commercially trade, triggering job losses and slower economic growth.

Indian-American trade relations have developed in recent years but have been vulnerable to market access disputes and internal political pressures. India is one of the fastest global world economies and it can therefore face a slowdown.

The sectors must be affected by American prices

Estimates from the New Delhi-based global trade research initiative suggest that sectors with a high intensity of labor such as textiles, gems and jewelry, leather items, food and cars will be the hardest affected.

“The new tariff regime is a strategic shock that threatens to erase the long-standing presence of India in the United States, provoking unemployment in export centers and weakening its role in the industrial value chain,” said Ajay Srivastava, founder of the reflection group and a former Indian trade official.

The United States has so far exempt certain sectors such as pharmaceutical products and electronic products from additional prices, bringing a certain relief for India because its exposure in these sectors is significant.

Exporters fear losses

Puran Dawar, an exporter of leather shoes in the city of Agra from northern India, says that the industry would take a short -term substantial blow, unless domestic demand strengthens and other markets abroad buy more Indian products.

“It is an absolute shock,” said Dawar, whose business with the United States has increased in recent years. Dawar customers include the main Zara fashion retailer.

Dawar, who is also the regional chairman of the leather export council – an export promotion organization – said the United States should understand that stiff prices will harm its own consumers.

Groups representing exporters warn that new import rates could affect small and medium -sized Indian enterprises that depend strongly on the American market.

“This is a delicate situation. Some product ranges will simply become non -viable overnight,” said Ajay Sahai, director general of the Indian export organization federation.

Modi promises not to give in to pressure

The prices come as the US administration continues to put pressure for better access to the agriculture and dairy products in India.

India and the United States have held five series of negotiations for a bilateral trade agreement, but have not yet concluded an agreement. This is largely because New Delhi has resisted the opening of these sectors with cheaper American imports, citing concerns that this would endanger the jobs of millions of Indians.

Prime Minister Narendra amended not to give in to pressure.

“For me, the interests of farmers, small businesses and dairy products are the highest. My government will ensure that they are not affected,” said Modi during a rally this week in his original state of Gujarat.

Modi said the world witnessed a “policy of economic selfishness”.

An American delegation has canceled his intention to visit New Delhi this week for a sixth cycle of negotiations.

India provides for local reforms to amortize the price of prices

The Indian government has started working on reforms to stimulate local consumption and isolate the economy.

He decided to modify the tax on products and services, or the consumption tax, to reduce insurance costs, cars and devices before the main Hindu Diwali festival in October.

The government council will meet at the beginning of next month to decide to reduce taxes.

The Ministry of the Trade and the Ministry of Finance discuss financial incentives that include favorable banking loan rates for exporters.

The Ministry of Trade also weighs the stages to extend exports to other regions, in particular Latin America, Africa and Southeast Asia. Trade negotiations underway with the European Union could gain a renewed emergency while India is working to reduce its dependence on the American market.