India’s Small Exporters Advocate for Import Duty Cuts Amid U.S. Tariffs

India’s small engineering exporters are urging tariff cuts on certain U.S. imports to counteract the impact of 25% U.S. tariffs on steel and aluminum. With potential reductions, they anticipate improved trade relations and support from the Indian government. Notably, engineering exports to the U.S. have shown significant growth despite looming challenges.

India’s small engineering goods exporters have requested government intervention to lower import tariffs on specific U.S. products in response to impending tariffs on steel and aluminum established by the Trump administration. The U.S. tariffs, which are set at 25% and will become effective on March 12, have led to heightened anxiety among Indian exporters who fear a reduction in orders and an increase in operational costs.

Pankaj Chadha, the chairman of the Engineering Export Promotion Council, indicated that nearly $7.5 billion of India’s $20 billion in annual engineering goods exports stand to be affected. The EEPC, along with other industry bodies, has advocated for tariff reductions on select U.S. items with minimal inbound shipments. This strategic move may lead to more favorable trading arrangements and facilitate discussions for a bilateral trade agreement.

As India’s trade minister Piyush Goyal engages in talks in the U.S., potential tariff cuts remain a focal point. Proposed adjustments could include reducing the import duty on U.S. steel scrap significantly, as well as moderating tariffs on various manufacturing products and select agricultural commodities. Exporters have expressed concern that India’s own planned safeguard duty of up to 14% on steel imports will exacerbate domestic pricing and further erode profit margins.

The engineering sector experienced an 18% increase in exports to the U.S. in January, amounting to $1.62 billion. This growth outpaced the overall sector growth of 7.44%, as stated by EEPC data. During the fiscal year from April 2024 to January 2025, exports reached $15.6 billion, primarily driven by heightened demand for industrial machinery, automobiles, and medical devices.

Chadha emphasized the pressing challenges within the engineering industry, accentuated by the newly imposed U.S. tariffs. He urged for ongoing government support, particularly in areas of export credit and technological advancement, to maintain sectoral competitiveness. In January, India’s global engineering exports rose to $9.42 billion compared to $8.77 billion the year prior, despite a sequential decline from December’s figures.

In summary, India’s small exporters seek reductions in import tariffs on select U.S. goods to mitigate the impact of new U.S. steel and aluminum tariffs. With significant portions of their export value at risk, they aim to secure a more favorable trade environment through governmental support and strategic tariff negotiations. Although growth in exports has been observed, ongoing challenges necessitate continued assistance for maintaining industry competitiveness.

Original Source: www.hindustantimes.com