KARACHI: Indian exporters are reeling after US President Donald Trump slapped punitive tariffs totalling more than 50 per cent on imports from the country, triggering panic among manufacturers and raising fears that billions of dollars in sales to India’s largest export market could vanish within months, reports the Financial Times.
The report for FT, by Chris Kay, Krishn Kaushik and Andres Schipani, is reproduced here: After Donald Trump announced punishing tariffs totalling over 50 per cent on Indian imports, big manufacturers in the world’s most populous country were deluged with anxious calls from investors and US clients.
Gokaldas Exports, a garment maker that generates half its revenues exporting from India to the US, where it supplies retailers including Walmart, Gap and Abercrombie & Fitch, said customers were asking if it could shift production elsewhere.
“It’s been insane — at 50 per cent tariff there is no business to be done,” said Sivaramakrishnan Ganapathi, the managing director of Gokaldas. “In the interim, brands are saying they’ll scale down their sourcing from India?.?.?.?they have options to go to Vietnam, Bangladesh, Sri Lanka.”
A broad section of Indian industry is in panic mode after the US president last Wednesday announced an additional 25 per cent rate on the country’s imports to be levied from August 27 on top of a 25 per cent duty imposed earlier this month.
Unless New Delhi can strike a deal with Washington, crucial sectors could be decimated, jeopardising Prime Minister Narendra Modi’s ‘Make in India’ push to turn the country into a manufacturing supply chain alternative to China.
Trump, who has previously denounced India as a “tariff king”, blamed New Delhi’s purchases of Russian weapons and oil for the additional rate, which puts at risk India’s largest export market, worth $87bn in the year to the end of March.
Some big-ticket export categories such as pharmaceuticals and smartphones are exempt for now from the US tariffs and may face separate levies. But rating agency Moody’s has warned that if the 50 per cent rate sticks beyond 2025, the yawning tariff gap with the rest of Asia would “severely curtail” India’s manufacturing ambitions and even prompt some foreign direct investors to pull out of the country.