Indian Exporters Unfazed by US Tariff: Focus on R&D and Skills Development

Indian exporters remain composed following US President Trump's tariff announcement, focusing on humanitarian goods which are exempt from sanctions. The industry is more concerned about the Iranian currency depreciation than US tariffs. Industry leaders urge government support for R&D and skill development to enhance export capabilities.

Amid the rising US tariffs, Indian exporters are staying calm, emphasizing their focus remains on humanitarian goods exempt from sanctions. As President Donald Trump proposed a 25% tariff on Iran's trading partners, industry insiders noted that India predominantly trades in humanitarian goods like food and pharmaceuticals. Ajai Sahai, CEO and DG of the Federation of Indian Export Organisations (FIEO), conveyed to ANI that there's no immediate alarm, as India's dealings with Iran involve goods outside the US sanctions' ambit.

Sahai pointed out that India's trade ties with Iran have been heavily skewed towards essentials such as food and medicines. He highlighted that the statement from the US administration has indeed stirred some uncertainty, but definitive clarity is awaited once an official directive accompanies the announcement. The more pressing issue for exporters is the sharp depreciation of the Iranian rial, which severely impacts consumer purchasing power and presents a real challenge to existing trade contracts.

Akshay Gupta from KRBL, a major player in the basmati rice sector, noted that despite the persistent demand for Indian rice, sanctions have significantly affected market dynamics. He remarked that although KRBL's exposure to Iran is now limited, the company has adapted by channeling trade through the UAE, where Iranian buyers are based, thus averting some risks. Gupta also acknowledged the added complications the proposed US tariffs would introduce.

Sahai also shed light on diplomatic efforts, citing recent encouraging statements by the new US Ambassador on trade negotiations, which suggest an ongoing willingness for dialogue. This could be a step toward resolving existing deadlocks and moving forward with the India-US Bilateral Trade Agreement. Looking ahead, the FIEO has appealed to the government to emphasize R&D support and skill development to bolster export strength. Sahai urged for policy measures such as fiscal incentives to encourage R&D, calling it a high-gestation process crucial for advancing India's technological and manufacturing capabilities.

(With inputs from agencies.)