EXPORTERS LOSE COMPETITIVE EDGE
Exporter groups estimate hikes could affect nearly 55 per cent of India’s US$87 billion in merchandise exports to the US, while benefiting competitors such as Vietnam, Bangladesh and China.
“The move will disrupt Indian exports to the largest export market,” said SC Ralhan, president of Federation of Indian Export Organisations, noting about 55 per cent of exports – including textiles, chemicals and leather – will face a 30-35 per cent price disadvantage against competitors.
The government should consider a one-year moratorium on banks loans for affected exporters, besides extending low-cost credit and easier availability of loans, he said.
Rajeswari Sengupta, an economics professor at Mumbai’s Indira Gandhi Institute of Development Research, said allowing the rupee to “depreciate is one way to provide indirect support to the exporters” and regain lost competitiveness.
Sustained tariffs at this rate could dent India’s growing appeal as an alternative manufacturing hub to China for goods such as smartphones and electronics.
The US-India standoff has raised questions about the broader relationship between India and the US, important security partners who share concerns about China.
However, on Tuesday the US State Department and India’s Ministry of External Affairs issued identical statements saying senior officials of the ministries and defence departments met virtually on Monday and expressed “eagerness to continue enhancing the breadth and depth of the bilateral relationship”.
Both sides also reaffirmed their commitment to the Quad, a partnership that brings together the US and India with Australia and Japan.
https://www.channelnewsasia.com/asia/trump-doubling-indian-tariffs-imports-takes-effects-5316661
