US tariffs provide competitive advantage over rival nations to Indian exporters, says FIEO President

The FIEO President expressed optimism about the impact of the tariffs on Indian exports, noting that while India faces a tariff of around 27 per cent, this remains manageable compared to the higher tariffs imposed on competing nations, particularly China.

The import tariffs imposed on peer Asian economies are more compared to the tariff rate of 27 per cent on India could be an advantage to us, he added.

"We have an advantage in that whatever the advantage China had with cheap raw materials, that advantage is gone. I think this is good," Ralhan said, adding that Indian manufacturers have an opportunity to increase the trade share.

He further stated that industries in countries like Turkey would be more adversely affected, given the disparity in tariff rates.

"Despite initial concerns, India's position remains strong, and this presents a crucial opportunity for Indian exporters to enhance production quality and maintain consistency in supply. Orders from the US are expected to start flowing to India soon," he added.

"This is a high time for the Indian exporters to increase their production quality," he added.

On the domestic front, Ralhan emphasised the need for government intervention to support Indian exporters.

He urged policymakers to facilitate the modernisation of small- and large-scale industries by reducing tariffs on energy-efficient and high-productivity machinery imports.

"They should either reduce the tariff on the import of machines which are more productive. I think that will help the Indian exporters to increase their production and make up with the quantum of orders we are expecting from the US," he said.

On April 2, US President Trump announced a widespread imposition of tariffs on countries worldwide. In February, soon after taking charge for the second time, Trump outlined a new trade policy focused on fairness and reciprocity and said that the US would implement reciprocal tariffs, charging other countries the same tariffs they impose on American goods.

As per the announcements, the import tariffs on other major countries are China (34 per cent), the European Union (20 per cent), Vietnam (46 per cent), Taiwan (32 per cent), Japan (24 per cent), India (26 per cent), the United Kingdom (10 per cent), Bangladesh (37 per cent), Pakistan (29 per cent), Sri Lanka (44 per cent), and Israel (17 per cent).

Under the imposed tariffs, goods from India will face a 27 per cent tariff on steel, aluminium, and auto-related goods and no tariffs on pharmaceuticals, semiconductors, copper, or energy products.