Rupee falls 22 paise to settle at 86.02 against US dollar
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Time of India
42 minutes ago
- Time of India
Trump tariff war: Deal or no deal - why it won't matter much for India
SBI Research has said that India will be able to diversify its export horizons to counter any negative impact of a less than favourable deal with the US. India-US trade deal: As 'fast-paced' talks between India and the US on an interim trade deal continue, the tariff rate that the Donald Trump administration will finally choose to impose on India is the biggest focus point. In April this year, Trump had announced a 26% reciprocal tariff rate on India. He later suspended tariffs for all countries to 10%, giving them room to negotiate a trade deal. The latest deadline for tariffs is now August 1, 2025. So where does India stand in the trade war that Trump has unleashed globally? What tariff rate would be advantageous to India? And, importantly if the tariff rate is not less than or near 20%, will India really be at a major disadvantage? In its latest report SBI Research has said that India will be able to diversify its export horizons to counter any negative impact of a less than favourable deal with the US. Deal Or No Deal - India Has Enough Room & Comparative Advantage 'We believe that even if the India-US deal doesn't come up as desired and 10% additional tariffs are imposed on India, there are various avenues for India to diversify its exports,' SBI Research has said in its report. The report also highlights an important point: India's service exports continue to achieve unprecedented levels, projected to reach $387.5 billion in 2024-25, primarily supported by robust performance in IT, financial and business services sectors, suggesting minimal impact on overall export figures. The United States has imposed tariffs on over 20 countries, with Asian countries seeing steeper tariff rates compared to India. This situation creates export possibilities for India to enhance its shipments to the US, particularly in sectors where it possesses revealed comparative advantage, the SBI report says. Following its trade agreement with the US, Vietnam now faces a reduced tariff rate of 20%. The extent to which India can negotiate similar tariff reductions with the US remains uncertain. Scope in Chemicals & Pharma Exports: SBI's analysis indicates that out of the top five US imports, India currently has a relative advantage only in chemicals. China and Singapore currently maintain larger export shares to the US market in this category. But, with China now subject to high tariffs, India has the potential to expand its chemical and pharmaceutical exports to the United States, the report says. Should India manage to seal a trade deal with tariff reductions below 25% (currently applicable to Singapore), it could gain a portion of the market share. 'If India can capture 2% share from these countries in Chemicals exports, then it can add 0.2% to its GDP. Another 1% share can be seized from Japan, Malaysia and South Korea which now face higher tariff than India, thereby adding 0.1% to its GDP,' the SBI report adds. Apparel Exports: There exists potential to gain market share in apparel exports from Bangladesh, Cambodia and Indonesia. India presently holds 6% of US apparel imports, and securing an additional 5% from these nations could contribute 0.1% to GDP. Looking Beyond US: India is currently reviewing the ASEAN-India Free Trade Agreement to address tariff irregularities and strengthen the "rules of origin" provisions, which have enabled substantial Chinese imports through ASEAN nations. ASEAN is a major trading partner for India, with bilateral trade reaching $123 billion in 2024-25. The share of ASEAN in India's exports has reduced over the years, while the share of imports has remained stable. India can enhance its exports to ASEAN and prevent dumping of goods from China through ASEAN countries, says SBI Research. Furthermore, opportunities exist to enhance exports to Asian nations currently facing elevated US tariffs. India could increase its shipments of Chemicals, Agricultural goods, Livestock & its products, Waste and Scrap (particularly metal scrap) and specific Animal and Vegetable Processed Products to these markets. Donald Trump's Tariff Letters Since last week, Trump has been on a letter sending mission, with tariff updates sent to over 20 countries. India has so far not received any letter from the US President, possibly due to his own admission that the two countries are nearing a trade deal. Whilst 17 countries have received reduced tariffs compared to the April 2 announcement, six nations - Brazil, Canada, Japan, Brunei, Philippines and Malaysia - face increased tariff impositions. India-US Trade Deal: Where Do Things Stand? 'The final call on the India-US trade deal will be in the coming days, with the mini trade deal likely to be announced by mid-July. As per the latest information, India has already presented a final 'decent offer' from its side, which will be reviewed by those calling the shots at the Capitol. Basis indications, India's proposal covers goods trade worth around $150 billion to $200 billion between the two countries,' says the report. Last week while talking about sending tariff letters, Trump said, "We've spoken to everybody. ...it's all done. I told you we'll make some deals, but for the most part, we're going to send a letter…Now we've made a deal with United Kingdom. We've made a deal with China. We're close to making a deal with India.' Even as India has firmly said that it does not believe in working on 'deadlines' for trade agreements, a team of Commerce Ministry officials are currently in the US for another phase of negotiations. Commerce Minister Piyush Goyal has said that talks on a trade deal between India and the US are progressing at a 'fast pace'. India has hardened its stance on agriculture and dairy products and reports suggest that these two points of contention are likely to be left out of the interim trade deal. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Fibre2Fashion
3 hours ago
- Fibre2Fashion
Sentiments improve in south Indian cotton yarn trade as demand rises
Insights Rising cotton prices have lifted sentiment in south India's yarn trade, with improved demand in Mumbai and Tiruppur. Loom activity and reduced worker absenteeism have boosted consumption, while mills cut discounts to protect margins. Traders are optimistic about a potential India-US trade deal. Cotton prices in Gujarat have surged by * â€' * per cent, driven by higher CCI auction rates and limited stocks. To read the full story, become a PRIME member today. All Corporate Members and TexPro Subscribers are eligible to access F2F PRIME CONTENT using the same login credentials. Latest News Insights Latest News Insights Exclusive Industry Articles & Features Exclusive Industry Articles & Features Detailed Article Analytics & Insights Digital Edition of Fibre2Fashion Magazine Digital Edition of Fibre2Fashion Magazine Get notified in your mailbox
Mint
3 hours ago
- Mint
India adopts wait-and-watch approach amid US tariff uncertainty
New Delhi: India is adopting a wait-and-watch approach amid growing uncertainty over the US's proposed tariff hikes for multiple countries, a senior government official said on Tuesday. Rajesh Agarwal, chief negotiator for the India-US bilateral trade agreement and special secretary in the ministry of commerce, said it was too early to devise a contingency plan in the absence of clarity from the US on the scope and impact of the new measures. 'Any backup plan has to be based on actual developments. As of today (15 July), it is too early to estimate how the differential tariffs will play out from 1 August,' Agarwal said during a media briefing following the release of the latest monthly trade data. 'The US has listed new tariffs covering around 25 countries, including the EU (European Union), and has also spoken about finalising some trade deals. But the full spectrum of the tariff rollout is still unclear,' he added. 'Both sides (India and the US) are working according to the terms of reference agreed upon during the first visit of the US team in March' for discussions on the bilateral trade agreement, he said. Commerce Secretary Sunil Barthwal said there was no clarity yet on the timeline or actual enforcement of the US's reciprocal tariffs. 'So far, except for China, all countries are facing the same 10% base tariff along with sector-specific tariffs on steel, aluminium, and auto components,' Barthwal said, speaking to the media. 'These tariffs have only been announced, they haven't been implemented yet. And we don't have clarity on when exactly they will be enforced.' He added that India's steady export performance in such an environment reflected the effectiveness of the government's policy framework. 'Our export markets remain stable, and our strategy continues to focus on select sectors and services,' Barthwal said. Agarwal added that the government is closely tracking US import patterns. 'While overall tariff collections have increased, US imports haven't seen a major decline outside the sectors directly affected, such as metals and automobiles,' he said. India-US trade entered a challenging phase after US President Donald Trump announced steep reciprocal tariffs in April, affecting around 87% of Indian exports. Key sectors such as electronics, gems and jewellery, textiles, rice, spices, and processed foods will face higher duties when the tariffs kick in. Agarwal said Indian industry has begun engaging with their US counterparts and importers to assess potential impacts and adjust strategies. 'We need not worry at this stage. We will assess the situation as it unfolds, and the government will step in with necessary measures as needed,' he added. Despite the reciprocal tariff setback, the US remains one of the few countries with which India maintains a strong merchandise trade surplus. In 2024-25, Indian exports to the US rose 11.6% to $86.51 billion, while imports grew 7.4% to $45.33 billion, pushing the surplus to $41.18 billion. Another senior official said India and the European Union will hold the next round of negotiations on their proposed free trade agreement (FTA) in the first week of September, following an exchange of offers in the services sector last week. 'The 12th round of talks concluded last week in Brussels. We have exchanged our offers on services and non-services,' said L. Satya Srinivas, special secretary in the department of commerce. 'There were discussions on that, along with key interests in market access for goods,' he added. Negotiations for a comprehensive FTA with the EU, including pacts on investment protection and geographical indications, were relaunched in June 2022 after an eight-year hiatus.
