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Economic Times
a few seconds ago
- Business
- Economic Times
Trump tariffs deal $12-billion blow to Indian engineering exports; EEPC eyes market diversification
Synopsis The Engineering Export Promotion Council of India (EEPC) has warned that Trump's 25% tariffs could hit $12 billion worth of Indian steel and aluminium exports, sharply impacting shipments to the US. Chairman Pankaj Chadha said exporters must diversify to markets like South America and the EU to reduce reliance on the US. Agencies Indian engineering goods exporters brace for a significant blow as the US imposes a 25% tariff on imports starting August 1, impacting $12 billion worth of steel and related products. This move threatens India's largest engineering goods market, potentially leading to shipment declines and prompting a search for alternative markets in South America and Mexico. India's engineering goods exporters are preparing for a substantial impact following US President Donald Trump's announcement of a 25% tariff and additional penalties on all Indian imports starting August US is India's largest market for engineering goods, with shipments valued at $19.15 billion in FY25, an increase of 8.7% from $17.62 billion in FY24. Of this, steel, aluminium, and related products account for over 60%—around $12 billion—which now face major reciprocal tariff action. 'The total value of engineering exports to the US is around $19-20 billion, and over $12 billion worth of steel and related goods will be affected by the reciprocal tariffs. That's a huge blow. Steel, aluminium, and their derivatives—exports of these key items will become costlier, leading to a likely dip in shipments,' said Pankaj Chadha, Chairman, Engineering Export Promotion Council of India (EEPC).Trump's announcement comes as India and the US were exploring a bilateral trade agreement (BTA) and touting a 'special strategic partnership.' Chadha noted, 'Donald Trump's announcement came as a shock. On one hand, we were about to do a BTA with that country, and all along he was saying our PM is a close friend and US-India relations have a special strategic character, and now this.'He also stressed the unpredictable nature of Trump's trade moves: 'The transactional nature of the US president is such that you have to give something to get something. We have our red lines on dairy and agricultural products, and if both sides respect each other's red lines, then something meaningful and win-win can come out. But we need to see the fine print of the official documents first, and I'm sure a negotiation process will start rolling once that is clear.' Steel and aluminium in focus Steel and aluminium account for over 60% of India's engineering exports to the US. With the new tariff structure, products such as hot-rolled steel coils, stainless steel products, aluminium sheets, and alloys will face immediate cost escalations, likely eroding their competitiveness in the US analysts said the tariff move could also prompt buyers in the US to shift sourcing to suppliers such as Vietnam, Mexico, or domestic US producers. 'Given that Indian steel and aluminium exports operate on tight margins, absorbing a 25% tariff is unviable. The most likely scenario is a drop in shipments and renegotiations of contracts,' said a Mumbai-based metal industry said EEPC is already working on mitigation strategies. 'We need to expand our global footprint further into South America—we're very close to signing FTAs with Chile and Peru. We should also double down on Mexico and work toward an agreement there. These three are emerging growth hotspots for engineering goods. We are in active dialogue with the EU as well. Derisking our global exposure holds the key in this tariff-ridden environment, so while our dependence on the US market cannot be completely eliminated, it can certainly be reduced.'He added that agriculture and dairy remain India's clear red lines in trade negotiations: 'We can't give away agriculture and dairy—that's definitely our red line.'For now, the EEPC chief has advised exporters to exercise caution until further clarity emerges. 'My message to engineering players and EEPC members will be: once we know the extent of penalties, we will suggest the roadmap ahead,' he said.
India Today
2 hours ago
- Business
- India Today
No compromise on agriculture, farmers' interest: Government sources on US tariffs
The recent 25% tariff imposed by US President Donald Trump is unlikely to harm the overall economy, said a senior government official familiar with the official said the impact on exports and GDP will be minimal, and that India's key sectors like agriculture, dairy, and micro, small and medium enterprises (MSMEs) will remain official said the government is closely watching the developments but sees no reason for alarm.'There may be a marginal impact of the 25% tariff, but this impact is not at all alarming on Indian markets,' the official said. 'The worst-case scenario may lead to a GDP loss of less than 0.2%, which is manageable.'NO COMPROMISE ON FARMERS INTERESTThe official made it clear that India will not compromise on the interests of its farmers. 'The farmer's interest is paramount. There is no question of allowing the import of genetically modified (GM) crops,' the source said. 'India will not agree to any terms that hurt our agriculture or dairy sectors.'There will also be no relaxation on matters linked to religious sensitivities, including non-vegetarian milk and beef products, the official confirmed.'There is no compromise on issues like non-veg milk and beef. These are matters of food safety and religious sentiment,' the official EXPORTS UNAFFECTED, SLIGHT FALL POSSIBLEWhile the tariff has raised concern across sectors, the government source explained that most of the goods exported from India to the US are not under the new tariff bracket. 'Exports may fall slightly, but a large share of Indian goods going to the US will remain outside the new duties,' the official impact, if any, will be seen only in a few segments and is not expected to disrupt trade on a large scale. The government is keeping close track and is prepared to take necessary steps if things STANDING STRONG ON TRADEThe government is currently in discussions with the US for a bilateral trade agreement (BTA), which could also help reduce trade tensions. 'Negotiations for the BTA are moving in the right direction,' the official said. 'Once that deal is in place, both countries will have the opportunity to review the tariff structure.'The source also mentioned that India is not under pressure and will continue to safeguard national interests. 'India is giving top priority to its interests. There will be no adverse effect allowed on the interests of Indian farmers. The interests of the agriculture and MSME sectors will be protected at all costs.'- Ends advertisement
The Print
5 hours ago
- Business
- The Print
Linking trade and geopolitics will hurt US more than India
Such intemperate statements and announcements are a setback to significant work done since 13 February 2025, when Prime Minister Modi visited President Trump and the two agreed to launch negotiations for a Bilateral Trade Agreement between the United States and India. In another post, Trump states that 'We have just concluded a Deal with the country of Pakistan, whereby Pakistan and the US will work together on their massive oil reserve'. Clearly, bringing in India's relations with Russia, China and Pakistan into bilateral trade deal negotiations by Trump gives India an opportunity to recalibrate trade talks parameters. The India-US trade deal is no longer in the domain of bilateral economic engagement alone. US President Donald Trump has pushed it into the realm of geopolitics. In his characteristic communication through social media, Trump has slapped a 25 per cent tariff on India and also suggested that India will be penalised for 'buying vast majority of military equipment' from Russia and for being 'Russia's largest buyer of energy along with China at a time when everyone wants Russia to stop the killing in Ukraine'. Objectives of India-US Trade Agreement In February 2025, after the Trump-Modi meeting, the White House issued a statement confirming the agreement between the 'leaders of sovereign and vibrant democracies that value freedom, the rule of law, human rights, and pluralism'. It reaffirmed the strength of the India-US Comprehensive Global Strategic Partnership, anchored in mutual trust, shared interests, goodwill and robust engagement of their citizens. Besides launching a new initiative, the 'US-India COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology) for the 21st Century', they also decided to work out plans to negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by fall of 2025 to set a bold new goal for bilateral trade—'Mission 500'—aiming to more than double total bilateral trade to $500 billion by 2030. Subsequently, during the meeting between US Vice President JD Vance and Prime Minister Narendra Modi in April 2025 in New Delhi, Terms of Reference for negotiations of the Bilateral Trade Agreement (BTA) were finalised. The US expected the trade deal to include increased market access, a reduction in tariff and non-tariff barriers, and a robust set of additional commitments to ensure long-term benefits. The United States has long flagged issues relating to significant trade barriers with India. The US' total goods trade with India was an estimated $129.2 billion in 2024, and as a result, the United States ran a $45.7 billion goods trade deficit with India in 2024, a 5.1 per cent ($2.2 billion) increase over 2023. During the February meeting between Trump and Modi, India announced tariff reductions and its willingness to further reduce tariffs on US products as part of the BTA. India's average applied tariff is 17 per cent, among the highest of the world's largest economies, while the US average applied tariff is 3.3 per cent. India's average applied tariff rate on agricultural products is 39 per cent, while the US average applied tariff on agricultural products is just 5 per cent. In addition to tariffs, technical barriers to trade, regulatory barriers, and restrictions on access to the market in the services, industrial, and agricultural sectors also reduce US exports to India. Mexico, Canada, China, Germany, Japan, South Korea, Taiwan, Vietnam, UK & India, in that order, are the largest trading partners of the US. Also read: Geopolitical forces beyond New Delhi's control are at play in Trump's approach to India US Free Trade Agreement (FTA) partner countries provide greater market access through reduced or eliminated tariffs, intellectual property protection, and elimination of non-tariff barriers among other provisions. Accessing FTA markets can give a product or service a competitive advantage over products from other non-FTA countries. The US has 14 FTAs with 20 countries, which comprise about 40 per cent of US goods' exports. These are Australia, Bahrain, Chile, CAFTA-DR (Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras & Nicaragua), Colombia, Israel, Jordan, South Korea, Morocco, Oman, Panama, Peru, Singapore and USMCA (United States-Canada-Mexico). The recent US-EU FTA was preceded by Trump's threat of a 30 per cent tariff, which later escalated to 50 per cent. Now, the US-EU trade deal has settled for a 15 per cent tariff. But that is only the tip of the iceberg. Europe has agreed to spend around $1.3 trillion with America over the next three years. Europe will buy $750 billion worth of energy products from the US and invest $600 billion in the US market. In the bargain, EU gets total exemption on tariffs on aircraft and their components, semiconductor equipment, critical chemicals and some agricultural products. Interestingly, individual EU member countries will have to ratify this deal in their respective parliaments. The energy buying and investment promises will have to be done by individual members and the private enterprises in these countries. Trump should understand that a similar approach with India is next to impossible. India has signed 13 Regional Trade Agreements (RTAs)/Free Trade Agreements (FTAs) with various countries/regions, namely, Japan, South Korea, countries of the ASEAN region and countries of the South Asian Association for Regional Cooperation (SAARC), Mauritius, United Arab Emirates, and Australia. India's merchandise exports to all these countries/regions have registered a growth in the last ten years. India's Free Trade Agreement approach is generally based on four verticals—FTA with developed economies, trade agreements with countries rich in rare earth minerals, FTA with developing or emerging economies, and trade deals with immediate neighbours. Besides, there are trade agreements with regional groups such as ASEAN and BIMSTEC. The US-India negotiating teams will have to work on several issues pertaining to the elimination of tariffs, anti-dumping duty mechanisms and safeguards, and determine and define Rules of Origin framework. In a multipolar world, the US has to first recognise the ground realities. With more than 14 FTAs and new ones in the pipeline, especially with the EU, India has to diversify its market access to more countries. This will also mandate India to be more competitive as far as price and quality are concerned. Trump's failure to recognise FTA countries as equal partners and his my way or the highway attitude will not help the present economic situation, especially with a country of India's size and stature. Trump should also realise that the US manufacturing sector has performed very poorly over the last three or four decades. It will take another ten years for the US to meet its own past records. It has to ideally outperform China, South Korea, Vietnam, Taiwan and Japan. As far as automobiles are concerned, it has to beat China, India, Japan, Germany, and South Korea. Also read: India's diplomatic failures aren't just Trump's fault. It's the price of Modi's narcissism India's problems with the FTA For years, Washington has pushed for greater access to India's farm sector, seeing it as a major untapped market. But India has fiercely protected it, and rightly so, citing food security, livelihoods and the interests of millions of small farmers. India will also need to protect its basic agriculture sector for economic and political reasons. India's non-tariff barrier issues, such as its growing set of 'Quality Control Orders' (QCO), are significant obstacles to US market access and may need greater tactical handling in a trade deal. The US has raised concerns over what it calls India's growing and burdensome import-quality rules. Over 700 QCOs, part of the Atmanirbhar Bharat (self-reliant India) push, result in curbing low-quality imports and promoting domestic manufacturing. Meanwhile, India's manufacturing sector, especially the core sectors like steel, cement, metals refining, mining and infrastructure building, is stuck in the 1950s and 1970s. We are still using human beings in boilers, furnaces with 1245 degrees centigrade heat and shutting the plant for ten to twelve days every six months. By referring to India as a 'dead economy' and talking of an 'oil deal' with Pakistan, Trump is introducing the geopolitical element to trade talks. India reserves the right to look for national interest in the emerging geopolitical dynamics. Both Balochistan and Sindh are experiencing political turbulence and seeking freedom from Islamabad. The China-Pakistan Economic Corridor (CPEC), passing through Pakistan-occupied Kashmir, continues to remain a flashpoint in the region. After botched decades in Afghanistan, Trump is walking into another minefield in the region. Linking trade and geopolitics will hurt America more than the countries that are looking to partner for prosperity with the US. New Delhi could wait and watch, and restart FTA negotiations after Trump realises the futility of his irresponsible statements. Seshadri Chari is the former editor of 'Organiser'. He tweets @seshadrichari. Views are personal. (Edited by Theres Sudeep)
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First Post
8 hours ago
- Business
- First Post
Amid Trump's 25% tariffs on India, Scott Bessent says US trade team 'frustrated' over trade negotiations
US Treasury Secretary Scott Bessent said that the American trade team is 'frustrated' over negotiations with India as he defended Trump's move to impose 25% tariffs on Indian goods read more US Treasury Secretary Scott Bessent said that the American trade team is 'frustrated' over negotiations with India, describing it as 'slow-rolling things'. While speaking to CNBC, Bessent argued that while the negotiations started with New Delhi early, it has become an annoyance to American counterparts. Bessent expressed his frustration with India, just days after US President Donald Trump announced 25 per cent tariffs on Indian goods, describing it as 'penalties' for buying oil and military equipment from Russia. In the CNBC interview, Bessent argued that Trump and the whole trade negotiation team have been frustrated with India. STORY CONTINUES BELOW THIS AD 'India has also been a big buyer of Russian oil, which they then resell as refined products.' In that context, 'they have not been a great global actor,' he remarked. When asked if there is any potential for further negotiations with India ahead of the August 1 deadline, Bessent said that 'it will be up to India,' hinting at the fact that it will be New Delhi, which will have to make the first move for things to roll again. India awaits more clarity Meanwhile, sources close to the matter told CNBC-TV18 that India is unlikely 'to jump the gun' before more clarity emerges on the matter. New Delhi is also waiting for confirmation on the exact penalties or associated duties which Trump has warned about its ties with Russia. Amidst this chaos, the sixth round of negotiations for the first tranche of a Bilateral Trade Agreement (BTA) between India and the US remains scheduled for August 25. Meanwhile, discussions on bilateral trade are expected to continue in virtual mode. Soon after the Trump announcement, Union Minister Piyush Goyal briefed the Parliament today on the US tariffs, explaining that the commerce ministry is assessing the impact of the tariffs. Goyal assured that the government will take all necessary steps to safeguard 'our national interests'. The Trump administration is miffed with New Delhi Bessent is not the only top Trump official who expressed frustration over Trump-India ties. US Secretary of State Marco Rubio defended President Donald Trump's move to impose 25 per cent tariffs on India, arguing that India's purchase of Russian oil is a ' point of irritation' in New Delhi's relationship with Washington, DC. While speaking to Fox Radio on Thursday, Rubio said that the Indian purchases of Russian oil are helping Moscow's war efforts in Ukraine. 'Look, global trade – India is an ally. It's a strategic partner. Like anything in foreign policy, you're not going to align 100 per cent of the time on everything,' Rubio said in the interview. The secretary of state claimed that the Trump administration is 'disappointed' with India as it continues to buy Russian military equipment and energy. Rubio acknowledged India has 'huge energy needs and that includes the ability to buy oil and coal and gas and things that it needs to power its economy like every country does, and it buys it from Russia, because Russian oil is sanctioned and cheap and – meaning they have to – in many cases, they're selling it under the global price because of the sanctions.' STORY CONTINUES BELOW THIS AD However, he noted that 'it is helping to sustain the Russian war effort. So it is most certainly a point of irritation in our relationship with India, not the only point of irritation. We also have many other points of cooperation with them." 'But I think what you're seeing the President express is the evident frustration that with so many other oil vendors available, India continues to buy so much from Russia, which in essence is helping to fund the war effort,' and allowing this war to continue in Ukraine. Trump tariffs against India are now being seen as a pressure tactic to get New Delhi to agree to demands made by the US, which has, in recent days, got favourable trade deals with major partners like Japan, the UK and the European Union.
Economic Times
10 hours ago
- Business
- Economic Times
Delusional Donald Trump delivers rant on dead economy, Pak oil
AP US President Donald Trump New Delhi: US President Donald Trump stepped up his attacks on India on Thursday, dismissing it as a 'dead' economy, saying the country had among the highest tariffs in the world and slamming its ties with Russia. In response, India made it clear that the Centre will take all necessary steps to safeguard and promote national interest. 'I don't care what India does with Russia,' Trump said in his social media post. 'They can take their dead economies down together, for all I care. We have done very little business with India, their tariffs are too high, among the highest in the world.' Trump's latest barrage took place hours after he announced a shock 25% tariff against India, plus a 'penalty' for trading with Russia. These posts come ahead of a US trade team visiting New Delhi for talks on their proposed bilateral trade agreement (BTA) from August 25. The first part of the accord is to be concluded by October. The BTA is aimed at more than doubling bilateral trade in goods and services to $500 billion by 2030, from the current $191 billion. The US President has been consistently attacking India on tariffs but this is the first time that his messaging has taken such a turn. That comes on top of his insistence that he brokered the ceasefire between India and Pakistan. India has denied any third-party involvement in that matter. Still, Trump's tirade is being seen as a pressure tactic to get India to offer more concessions on market access and announce investments in the US. In a separate announcement of a trade deal with Pakistan, Trump also wondered in a social media post if the neighbouring nation could sell oil to India some day. He also referred to Pakistan's 'massive oil reserves,' although that country has not announced such big hydrocarbon discoveries. The US President also said on Wednesday that the US is in talks with India for a trade deal. Trump said India is willing to cut tariffs 'very substantially.' At that time, he had said, 'We are talking to India now. We will see what happens. It doesn't matter too much whether we have a deal or we charge them a certain tariff. But you will know at the end of this week.' It's not known what provoked the renewed assault on India, although Trump has been losing patience with Russian President Vladimir Putin's apparent unwillingness to reach a peace deal in the war with Ukraine. At a press conference, Trump again brought up BRICS and his belief that the grouping — which includes India, China and Russia — wants to sideline the dollar, although there isn't much actual evidence of this. He described it as an 'attack on the dollar and we are not going to let anybody attack the dollar. So it's partially BRICS and it's partially trade... We had a tremendous deficit.' BRICS also includes Brazil, South Africa, Egypt, Ethiopia, Iran, the United Arab Emirates and Indonesia. The president had termed India's trade policies as 'most strenuous and obnoxious' in his Wednesday ResponseIn a suo motu statement in both houses of Parliament, commerce minister Piyush Goyal said the government is examining the implications of the latest tariffs and is in consultation with all stakeholders, including farmers, exporters, MSMEs (micro, small and medium industries) and industry groupings. 'The implications of the recent development are being examined. The ministry of commerce and industry is engaged with all stakeholders, including exporters and industry, for taking feedback of their assessment of the situation,' he said. Goyal's assurance assumes significance as Trump's punitive duty could significantly dent India's goods exports of $85 billion to the US.'We will take all necessary steps to secure and advance our national interest,' Goyal said. This was similar to a government statement that was issued after the Wednesday tariff official ruled out any immediate retaliation against the US' unilateral measure. 'Since the situation is dynamic, we don't want to jump the gun,' the person April 2, Trump had issued an executive order on reciprocal tariffs, imposing additional duties in the 10-50% range on a host of countries. The additional duty on India was announced at 26%, including a baseline tariff of 10%.
