India Urged to Embrace Global Trade Dynamics
New Delhi: In a significant address on Thursday, Commerce and Industry Minister Piyush Goyal emphasized the need for Indian industries to move away from protectionist practices. He urged exporters to adopt a more reciprocal approach to international trade, particularly in light of recent tariff threats from the United States. Goyal reassured exporters that the government is actively working to safeguard their interests amidst these challenges.
Shifting Mindsets in Export Promotion
Minister Goyal’s remarks come as industries, particularly in the pharmaceutical and engineering sectors, express concern over potential tariffs imposed by the U.S. President Donald Trump. The minister highlighted the importance of exporters shedding their protectionist mindset and engaging with the global market confidently. He specifically mentioned the need for Export Promotion Councils (EPCs) to adapt to changing trade dynamics and to be proactive in their strategies. The apprehension among exporters is palpable, especially with the recent announcement of a 25% tariff on iron and steel products by the U.S. EEPC India Chairman Pankaj Chadha noted that the new tariffs could significantly impact approximately $5 billion in exports, with around $1 billion already in transit to the U.S. This situation underscores the urgency for Indian exporters to reassess their strategies and prepare for a more competitive global landscape.
Government’s Commitment to Exporters
In response to industry concerns, Commerce Secretary Sunil Barthwal reassured stakeholders that the government is focused on protecting labor-intensive sectors from adverse impacts. He encouraged exporters to share their needs and interests, particularly regarding tariff reductions and the elimination of non-tariff barriers. Barthwal also urged businesses to diversify their sourcing strategies, suggesting that they consider purchasing inputs from the U.S. to help mitigate trade imbalances. The backdrop of these discussions is President Trump’s ongoing criticism of India’s high tariffs. The U.S. administration has threatened to impose reciprocal tariffs on countries with higher duties than those in the U.S., starting April 2. This has prompted Indian officials to expedite negotiations with various trading partners to secure favorable terms for Indian exporters.
Aiming for Export Growth Amid Challenges
As India faces the prospect of a second consecutive year of declining goods exports, the commerce department has called on exporters to ramp up shipments in the remaining weeks of March. The goal is to approach last year’s export level of $437 billion. While total exports, including services, are projected to exceed $800 billion this fiscal year, Minister Goyal has set an ambitious target of $900 billion for 2025-26. The government is optimistic that ongoing negotiations for Free Trade Agreements (FTAs) will yield better opportunities for exporters and attract higher investments. Goyal’s commitment to working on multiple fronts to enhance India’s trade prospects reflects a proactive approach to navigating the complexities of global commerce.
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