Temporary Tariff Relief: A Boost for Indian Exporters Amid China-US Trade Tensions

The US administration's pause on reciprocal tariffs provides Indian exporters a temporary advantage, particularly in industries like textiles and electronics, amidst ongoing trade tensions with China. This 90-day relief presents opportunities but requires proactive action from Indian exporters and government support to sustain benefits.

The US administration's decision to pause reciprocal tariffs offers a fleeting opportunity for Indian exporters, primarily in sectors like textiles, leather, engineering, and electronics, where India competes closely with China. This strategic move comes on the heels of the US raising tariffs on Chinese imports to 125%, while easing duties for over 75 trade partners, including India.

According to the Global Trade Research Initiative (GTRI), as of April 10, imports from India will incur a flat 10% duty for the next 90 days, a considerable reduction from the previously proposed country-specific tariffs. This provides a window for Indian businesses to capitalize on the reduced tariff rates amidst the trade tensions between the US and China.

However, GTRI warns that these advantages are temporary and emphasize the need for India to optimize this period by strengthening its export framework and facilitating better cooperation with US clients. Suggestions include reinstating the interest equalisation scheme to aid small enterprises in accessing affordable credit and ensuring quick customs processing for exports.

Meanwhile, President Trump's recent announcement on reciprocal tariffs has caused global market volatility, highlighting fears of rising trade tensions potentially leading to economic downturns. The 125% tariff on China persists, underscoring the administration's focus on tariff parity to secure equitable trade.

(With inputs from agencies.)