Exporters Monitor USTR Investigation and Ongoing Trade Discussions
Indian exporters are closely monitoring the US Trade Representative’s investigations and ongoing negotiations for a bilateral trade agreement. They believe these discussions could provide them with a competitive edge over rivals from other countries. While the proposed 12.5% tariffs on 54 countries do not raise significant concerns, the same levy on China is a point of contention for Indian exporters.
Many exporters are questioning the findings related to forced labor, asserting that India has a strong legal framework governing labor standards. Ajai Sahay, director general of the Federation of Indian Export Organisations (FIEO), stated, “India is not a country that allows goods using forced labor. Any concern can be addressed through constructive dialogue.” He expressed confidence that both India and the US would work together to enhance trade ties during the ongoing Bilateral Trade Agreement (BTA) negotiations.
Puran Dawar, chairman of Dawar Group, emphasized that India’s footwear and leather sector is not associated with forced labor risks. He described it as a formal, employment-intensive, and globally audited sector. Dawar warned that additional US tariffs would harm compliant Indian MSMEs and workers while undermining the “China+1” sourcing strategy favored by American buyers.
Some exporters are considering front-loading shipments to ensure goods arrive in the US before the current 10% tariff regime concludes. An industry source noted that there is a 10-15 day window available due to the longer shipping routes. Since the US Supreme Court struck down reciprocal tariffs in late February, many Indian businesses have experienced improved demand from the US, benefiting from a level playing field.
A leading garment exporter remarked, “If the new tariffs are across the board, we do not have much to worry about as we can manage.” Unlike the previous year, when discounts were necessary to maintain business, American buyers are currently absorbing higher costs, which are being passed on to consumers. Another garment exporter confirmed that demand remains stable despite increased prices. Exporters are urging the government to ensure a comparative advantage over countries like China, Vietnam, and Bangladesh, particularly in traditional sectors such as textiles and footwear.
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