Goyal cautions exporters not to re-route goods from high tariff countries to US: Industry sources

New Delhi, Apr 9 (PTI) Commerce and Industry Minister Piyush Goyal on Wednesday cautioned exporters not to use India as a destination for re-routing goods originating from high tariff countries like China and other ASEAN nations to the US, industry sources said.

They said that buying goods from countries facing high US tariffs and then sending those to America may invite action from the American authorities which could include blacklisting of firms as such exports violate US rules of origin norms.

These issues and others pertaining to the US reciprocal tariffs were discussed during an inter-ministerial meeting called by the commerce ministry here.

While the US has imposed an additional 26 per cent duty on India, it has slapped 104 per cent on China, 46 per cent on Vietnam, 32 per cent on Indonesia, and 36 per cent on Thailand. These duties came into effect from April 9.

Industry sources who participated in the deliberations said that Goyal informed that the ministry is regularly monitoring imports from these countries as high duties may force them to dump goods in India.

It was also suggested to Indian exporters not to export their goods to the US through countries which are facing lower tariffs than India.

Further, the minister asked the industry chambers to immediately hold meetings of their national councils to discuss these tariffs.

Exporters were also asked not to enter into long-term contracts with buyers at discounted prices as still there are uncertainties about these tariffs.

Besides, they were asked to explore new markets, leverage free trade agreements, and set up more warehouses, if there is a need.

Talks on the trade pacts like the UK, European Union and Oman are progressing at a faster pace.

Exporters from several sectors, including shrimp, textiles, jewellery, toys and engineering, raised concerns over the possible impact of the US tariff on exports. Certain industries also flagged concerns over quality control orders.

The minister directed the Department of Commerce to hold a separate meeting with shrimp exporters and the fishing ministry to understand the sector's concerns. The US is the largest market for the domestic shrimp industry.

Out of India’s total shrimp exports, the country ships 40 per cent to America. Ecuador and Indonesia are major competitors of the domestic exporters in the US market.

According to estimates, the shrimp exporters are sitting on an inventory of about Rs 3,000 crore.

The exporters demanded immediate announcement of a 5 per cent interest subsidy, extension of soft loans and continuation of RoDTEP (Remission of Duties and Taxes on Exported Products) and RoSCTL (Rebate of State and Central Taxes and Levies) schemes.

According to think tank GTRI, India's merchandise exports to the US from sectors such as marine items, gold, electrical, and electronics are expected to decline by USD 5.76 billion this year due to increased American duties.

Further in the meeting, pharma sector players raised concerns that US President Donald Trump has threatened to impose tariffs on this sector, as well.

In 2024, India exported USD 89.81 billion worth of goods to the US.

The meeting deliberated issues pertaining to India's trade amid the imposition of the additional reciprocal tariffs by the US President Donald Trump-led administration.

Senior officials of the commerce and other ministries, including pharma, representatives of export promotion councils (EPCs) and the Federation of Indian Export Organisations (FIEO) attended the deliberations.

The US accounts for about 18 per cent of India's total goods exports and 6.22 per cent in imports, and 10.73 per cent in bilateral trade. Exports have declined for the fourth month in February due to global economic uncertainties.

India's merchandise exports stood at USD 395.63 billion during April-February 2024-25 against USD 395.38 billion in the same period previous year. The estimated value of service exports during April-February 2024-25 is USD 354.90 billion as compared to USD 311.05 billion in April-February 2023-24.

India's export sectors such as shrimp, carpet, medical devices and gold jewellery will face the impact of the 26 per cent additional duties announced by the US. PTI RR CS MR

Source: PTI