New Delhi:
With Donald Trump all set to turn out to be US president, Indian exporters could face excessive customs duties for items like vehicles, textiles and prescription drugs if the brand new US administration decides to pursue the ‘America First’ agenda, opined commerce specialists.
Specialists additionally mentioned that Trump may additionally tighten H-1B visa guidelines, impacting prices and development for Indian IT corporations.
Over 80 per cent of India’s IT export earnings come from the US, making it weak to modifications in visa insurance policies.
The US is India’s largest buying and selling accomplice, accounting for over USD 190 billion of annual commerce.
International Commerce Analysis Initiative (GTRI) Founder Ajay Srivastava mentioned that Trump could lengthen tariffs past China to incorporate India and different nations.
Trump had earlier known as India a “giant tariff abuser” and in October 2020 labelled India because the ‘tariff king’.
These remarks recommend that Trump’s second time period may deliver harder commerce negotiations. he mentioned.
“His America First agenda would seemingly push for protecting measures, similar to reciprocal tariffs on Indian items, doubtlessly including limitations for key Indian exports like vehicles, wines, textiles, and prescription drugs. These will increase may make Indian merchandise much less aggressive within the US, impacting income in these sectors,” Srivastava mentioned.
Nevertheless, a harder US stance on China may create new alternatives for Indian exporters, he added.
The bilateral commerce in items between the 2 nations stood at USD 120 billion in 2023-24 as towards USD 129.4 billion in 2022-23.
A GTRI report had earlier acknowledged that in accordance with WTO’s World Tariff Profiles 2023, the US additionally imposes excessive duties on objects like dairy merchandise (188 per cent), Vegetables and fruit (132 per cent), cereals and meals preparations (193 per cent), oilseeds, fat and oils (164 per cent), drinks and tobacco (150 per cent).
Worldwide commerce professional Biswajit Dhar mentioned that Trump would improve tariffs in varied sectors as he has to observe his name for MAGA (Make America Nice Once more).
“With Trump coming to energy, we’re going to enter a special period of protectionism,” Dhar mentioned including sectors like electronics could get successful.
He added that as earlier Trump has walked out of Trans-Pacific Partnership (TPP), there might be darkish clouds on IPEF (Indo-Pacific Financial Framework for Prosperity).
The 14-nation bloc was launched in Tokyo by the US and different Indo-Pacific nations on Could 23, 2022.
“Allow us to see what he does with IPEF,” Dhar cautioned and added that nothing is predicted to maneuver within the World Commerce Organisation (WTO).
Federation of Indian Export Organisations (FIEO) DG Ajay Sahai mentioned that “we may count on Mr Trump to push for extra balanced commerce. However commerce disputes would possibly come up round tariffs”.
Going by the growing development of protectionism, Sahai mentioned, the identical would proceed with tighter immigration guidelines.
Agneshwar Sen, Associate-Tax and Financial Coverage (Worldwide Commerce), EY India mentioned it might be anticipated that the US will use excessive tariffs strategically to onshore manufacturing and alter present provide chains.
India may face increased tariffs on exports like textiles, chemical compounds, pharma and auto/ engineering merchandise, Sen mentioned.
“India must both search various markets (which will probably be tough) or retaliate with its personal tariffs on US exports. Alternately, we have to be prepared for a commerce deal that’s enticing to the US whereas not simply defending our present pursuits however creating newer ones,” he added.
Additional Srivastava mentioned that Trump has expressed issues about outsourcing, and whereas some statements could also be marketing campaign rhetoric, India ought to put together for potential measures affecting IT exports.
H-1B visa insurance policies are essential for the motion of expert professionals, particularly from India’s IT sector.
“Trump’s stricter immigration stance may result in modifications in visa guidelines, impacting Indian IT professionals and elevating prices for Indian IT corporations,” the GTRI Founder mentioned.
Nevertheless, he added that Trump is predicted to ease labour and environmental requirements, which may make it simpler for Indian exports to enter the US market.
“Trump would seemingly push India to align intently with US geopolitical goals, doubtlessly increasing India’s position as a substitute provider in sectors like electronics and prescription drugs however doubtlessly limiting India’s international coverage flexibility,” he mentioned.
Likewise, India’s growing demand for superior expertise, power, and capital items from the US opens avenues for increasing bilateral commerce.
Between FY’2020 and FY’2024, India’s merchandise exports to America rose by 46 per cent from USD 53.1 billion to USD 77.5 billion.
Imports from the US additionally grew to USD 42.2 billion final fiscal from USD 35.8 billion in 2019-20.
Then again, commerce in companies between the 2 nations expanded from USD 54.1 billion in 2018 to an estimated USD 70.5 billion in 2024, a 30.3 rise.
India can also be a key vacation spot for American companies similar to skilled, scientific, and technical companies, manufacturing, and IT. Washington is the third largest investor. India obtained USD 66.7 billion between April 2000 and June 2024.
India buys navy tools and Boeings value billions of {dollars} from the US and conducts its over 90 per cent world commerce in US {Dollars}.
“The US corporations like Google, Fb collect Terabytes of information on daily basis and earn billions of promoting {dollars} yearly from India. Amazon which needed to withdraw from China, is the largest on-line retailer in India. The US earns {dollars} from India from varied engagements and never simply commerce,” Srivastava mentioned.
(Apart from the headline, this story has not been edited by NDTV workers and is revealed from a syndicated feed.)