India Aims to Offset Tariffs with Local Sales

In the wake of additional 25% tariffs announced by the United States, India's Ministry of Commerce and Industry today held a stakeholder consultation with exporters from the textiles and chemicals sector.

Industry sources have told CNBC TV18 that the Export Promotion Mission's schemes will be tailor-made for sharper focus based on specific needs to help affected sectors, for which work is underway at a fast pace.

The Export Promotion Mission was announced in this year's Union Budget with an outlay of ₹2,250 crores. While trade diversification was being looked at anyway to avail opportunities due to global disruptions in trade, sources added that sectors with fewer export orders will use strong domestic demand to substitute for fewer exports.

11 EPCs (Export Promotion Councils) from the textiles sector were present at the meeting. India's textiles sector exports goods worth $11 billion to the US, which is 9% of the US' import basket in the sector.

Industry sources explained that though only 6% of India's textiles sector is directly impacted by US tariffs, the absence of long-term export orders leads to difficulties in the diversion of exports to other geographies.

Textiles exporters have sought an extension in the RoDTEP (Remission of Duties and

Taxes on Exported Products) and the RoSCTL (Rebate of State and Central Taxes and Levies) scheme for a period of 5 years, lower compliance burden, ease in advanced authorization norms, along with a reduction in port charges. Most ports in India are handled by the private sector. While requests have already been made to the GK Pillai-led committee on RoDTEP for relief, exporters have also sought dedicated shipping lines to the US, EU, and Japan, an issue which is handled by the Ministry of Ports and Shipping.

Among chemicals, India exports 20 products from the sector to the US worth $6 billion, and the tariffs are expected to impact 75% of the country's exports. As many exported items are value-added on imports from China, industry sources pointed out that the impact of tariffs is expected only on value-added products, as chemicals are needed across geographies, adding that diversion of chemical exports is possible. Industry is already in talks with importers in other geographies.

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