'US Tariffs to Have Long-Term Impact on Trade, Marine Exports': Commerce Ministry Tells PAC
The Wire Staff
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New Delhi: US President Donald Trump’s tariffs will have a long-term impact on India’s trade as well as marine exports, the Union ministry of commerce has informed the Public Accounts Committee (PAC) on Monday.
The PAC, headed by Congress MP K.C. Venugopal, met on Monday to discuss the "Performance Audit report on the Export Promotion Capital Goods Scheme". Several questions were raised on the impact of the US tariffs on Indian exports during the meeting, The Hindu has reported.
During the meeting, parliamentarians from both sides of the aisle including Venugopal raised concerns about the impact on India's marine export sector, particularly around how they would affect India's coastal towns if shrimp exports decline.
Washington had announced a whopping 50% tariff for exports to the US – 25% as what Trump has called a “reciprocal” rate in response to India’s tariffs, and an additional 25% as “penalty” because India continues to import oil from Russia. On top of that, there is also the 5.76% countervailing duty and 3.96% anti-dumping duty, taking the total to 59.72%.
Rajesh Agarwal, Special Secretary in the Department of Commerce, said that the high tariffs had placed India at a disadvantage in comparison to its competitors, according to the paper. He said India was working on market diversification including Free Trade Agreements with the UK and the European Free Trade Union bloc which includes Switzerland, Iceland, Norway and Liechtenstein.
The Wire has previously reported on the sectors that will be most hit by Trump tariffs in India, with the shrimp industry topping the list analysed by Global Trade Research Initiative (GTRI).
During the meeting, Agarwal said that a long-term negative impact would be felt on trade.
The committee members raised questions about the lack of clear outcomes from the Export Promotion Capital Goods Scheme which aims at facilitating imports of capital goods to enhance Indian manufacturing.
Agarwal also said that concerns about adverse impact on India's pharmaceutical sector was unfounded as China remains India's key competitor in the sector which has also been affected by similar tariffs, the report said.
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