Joy for exports: Textiles, carpets, leather will benefit after India-US agreement
New Delhi: Although details are still emerging, the announcement of the India-US trade deal could not have come at a more opportune time.
Having just shipped containers for the summer season, textile, leather and footwear manufacturers were worried about orders for next season.
Smaller players had almost stopped shipments over the past few months and larger companies, which had deeper pockets, were holding on because of the heavy discounts they were offering.
while their US buyers were also taking a small hit.
With the announcement of the trade agreement, Indian goods have suddenly started looking more competitive.
The deal means that a product will face an additional tariff of 18% over the MFN or product-specific rate.
Tariffs on World & India
At 18%, the levy on Indian apparel will be slightly lower than the 20% levy on clothes made in Bangladesh or Sri Lanka.
Similarly, Indian carpets, which had lost significant market share, would now be competitive against carpets shipped from Turkey, while flooring would be more affordable in American stores.
Exporters of gems and jewellery can now feel a sense of relief, as their competitive advantage has diminished.
Indian goods will get a slight advantage due to the imposition of a 34% duty on many Chinese products.
However, some regional tariffs, such as those on auto parts and metals, will remain in place.
However, businesses are awaiting complete clarity on the terms of the trade agreement.
There is no joint statement at the moment and the claims made by US President Donald Trump on his social media account have not been fully responded to by the Indian authorities.
With India signing trade deals with the UK and the EU, businesses will be able to better rebalance their portfolios by diversifying their export destinations and hedging against future flip-flops by Trump.
India’s exports to the US grew 11.3% to $59 billion between April and November, led by a doubling of smartphone shipments to $16.7 billion.
Frontloading of exports to beat the tariff deadlines, which began in August, has also supported exports during this period.
Moreover, the tariffs had no effect on about 40% of India’s exports, which included electronics and pharmaceuticals.
The deal shows the strength of two democracies: Goyal: A big day for India-US relations, as the trade deal has been finalised with significantly reduced tariffs of 18%, paving the way for stronger trade relations and mutual development…
This historic deal will enhance our strategic partnership and greatly benefit both countries and their people.
Trade between India and the US is set to further flourish,” Union Home Minister Amit Shah posted on Twitter.
Commerce and Industry Minister Piyush Goyal said the agreement “highlights the power of two great democracies working together for the shared prosperity of their people.
“Both India and the US are natural allies, and our partnership will co-create technologies, develop solutions, and work together for peace, growth, and a brighter future for India and the US.” ”
The US and India have complementary strengths. Both countries can co-create technologies and develop solutions that will benefit the world.
The trade agreement between the US and India will brighten the future of both the countries. The trade agreement between India and the US is a mutually beneficial agreement.
The deal will greatly benefit the citizens and industries of both the countries,” said IT and I&B Minister Ashwini Vaishnav.
Businesses were also excited. Aditya Birla Group Chairman Kumar Mangalam Birla said,
“Aditya Birla Group is the largest Indian investor in the US, and we see this agreement will help shape more resilient supply chains, open up manufacturing opportunities and enhance long-term economic competitiveness in both the US and India.”
