New Delhi: At the aftermath of the 50% tariffs imposed by the US, India’s exports involving key-labour intensive items took a hit in October, with the high tariffs making Indian products less competitive.

The products which have been affected by the tariffs include garments, leather products, engineering goods, gems & jewellery and chemicals, reported The Hindu Businessline.

“Although in the April-October period this year, India’s exports to the US, posted a growth of 10.15 per cent to $52.11 billion, the concern is that as soon as the 50 per cent tariffs were imposed in August-end, exports to the country got hit,” said a Delhi-based exporter.

One of the worst affected sectors in October was textiles, including readymade garments, with overall exports falling 12.9% to $2.66 billion, as buyers held back orders.

“There has been a double digit fall across all categories. The US tariffs are hurting,” Sanjay Jain, former chairman of the Confederation of Indian Textile Industry (CITI), told The Hindu Businessline.

After four consecutive months of growth, overall engineering exports too registered a steep fall of 16.71% to $9.37 billion.

“The decline in October was expected, considering that the 50 per cent tariff imposed by the US came into force in the last week of August,” said the Engineering Export Promotion Council (EEPC) of India.

On the other hand, the leather and gems & jewellery sectors, too were badly hit by the US tariffs, recording a decline of 15.66% to $314 million and 29.5% to $2.28 billion, respectively in October.

“Our US buyers are awaiting the India-US trade deal. There is hope of an early deal or competing countries, such as Vietnam and Indonesia, would get our orders,” said a Chennai-based leather exporter.

Earlier, owing to the high tariffs, India’s exports had decreased 11.8% to $34.38 billion in October. Similarly, the trade deficit too increased to a record high of $41.68 billion primarily because of a rise in gold imports.

Meanwhile, the country’s imports jumped 16.63% to an all-time high of U$76.06 billion owing to high inbound shipments of the yellow metal, silver, cotton raw/waste, fertiliser, and sulphur, government data had revealed.

Earlier in September, the trade gap had increased to $31.15 billion which was also the highest in over a year. Crude oil imports too decreased to $14.8 billion in October from USD 18.9 billion when compared to the same month last year.

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