Exporters start talks with buyers on US tariffs

With the US announcing 26 per cent additional import duties on Indian goods from April 9, domestic exporters on Friday said they have started talks with their American buyers on ways to absorb these heavy taxes.

According to them, communications between the Indian suppliers and American buyers have already started moving as these duties would hurt exports and job creation.

"We have to talk to them about how to handle this unprecedented situation," Federation of Indian Export Organisations (FIEO) President SC Ralhan said.


The Ludhiana-based hand tool (an engineering sector item) exporter also said that the sector will not be able to absorb the high duties because of the high steel cost in the domestic market.

"Over this, the government is considering imposing a safeguard duty, which they should reconsider. The US duty will impact demand," Ralhan said, adding that certain steel prices in India have jumped from USD 50,000 per tonne to USD 55,000 per tonne in the last five days only.

A leather-sector exporters said that they have already started talks with the US buyers on the matter.

"The duties will hurt demand for leather goods in the US. Buyers want us to share their losses. The US buyers have asked us to hold the production for some time. At present, the US levies about 10 per cent duty," India's leading footwear exporter and Farida Group Chairman Rafeeq Ahmed said.

He said that in the long run, the US market size for the sector would shrink as demand will come down.

FIEO Vice-President from the woolen sector Ravikant Kapur said that now India should consider reducing tariffs for US products.

"Cutting duties for America will be better for us in the long run as the US is a good trading partner of India. The US is the largest market for us for home furnishing and carpets. Present duty is 6 per cent. We are talking to our buyers on the matter as we need more clarity on the issue," Kapur said.

Turkey and Egypt are major competitors of India in the carpet sector, and the US has imposed only 10 per cent duty on them as against 26 per cent on India, Panipat-based carpet exporter Lalit Goel said.

"India must talk to the US on taking out the sector from this high duty as it would hurt our exports to America. We may have to cut jobs to deal with this. About 35 lakh people are involved in this business," he said, adding out of Rs 16,000 crore, "our exports to the US is RS 9,000 crore".