NEW DELHI– The Federation of Indian Export Organisations (FIEO) on Thursday voiced serious concern over the U.S. government’s decision to impose an additional 25 percent tariff on Indian-origin goods, pushing duties on many export categories up to 50 percent starting Friday.
FIEO President S.C. Ralhan called the move a “setback” and warned it could severely hurt India’s shipments to the U.S. Roughly 55 percent of India’s exports to the U.S., valued at $47–48 billion, now face pricing disadvantages of 30–35 percent, leaving them uncompetitive against rivals from China, Vietnam, Cambodia, the Philippines, and other Asian markets.
The hardest-hit sectors include textiles and apparel, where manufacturers in Tiruppur, Noida, and Surat have halted production amid rising costs and eroding margins. Indian producers are steadily losing ground to lower-cost competitors in Vietnam and Bangladesh. Seafood exports, particularly shrimp, also face major risks as the U.S. accounts for nearly 40 percent of India’s marine trade. The higher tariffs could lead to stockpile losses, supply chain disruptions, and increased distress among farmers.
Ralhan warned that other labor-intensive industries — including leather, ceramics, chemicals, handicrafts, and carpets — will also suffer steep declines in competitiveness, especially against producers in Europe, Southeast Asia, and Mexico. Delays, canceled orders, and shrinking cost advantages are looming threats, he said.
To cushion the blow, the FIEO president urged immediate government support, including expanded interest subvention schemes and greater export credit access to help companies maintain working capital and liquidity. He called for easier and low-cost credit, with special emphasis on MSMEs, backed by banks and financial institutions under guidance from both the government and the Reserve Bank of India.
Ralhan also requested a one-year moratorium on repayment of principal and interest on loans, along with an automatic 30 percent increase in existing credit limits and collateral-free lending on lines similar to the ECLGS. These measures, he said, would provide relief without heavily burdening the exchequer.
The FIEO further recommended widening production-linked incentive (PLI) schemes, investing in infrastructure and cold-chain storage, and accelerating trade diversification through free trade agreements with the European Union, Oman, Chile, Peru, the GCC, Africa, and Latin America, including early-harvest provisions for labor-intensive sectors. At the same time, the group stressed that urgent diplomatic engagement with the U.S. remains critical. (Source: IANS)
