Exporters keep tabs on USTR probe, trade talks

NEW DELHI: Indian exporters are keeping close tabs on the US Trade Representative's investigations and the talks for a bilateral trade deal, which they expect will put them at an advantage compared to some of their rivals from other countries.

While they are not too worried with the latest proposal to impose 12.5% tariffs on 54 countries, what bothers them is the same levy on China.

But, most are questioning the findings and arguing that India is not a country that allows goods using forced labour. "India has a robust legal framework governing labour standards and committed to responsible business practices. Any concern can be addressed through constructive dialogue. Since India and the US are actively engaged in BTA negotiations, we are confident both sides will work together to strengthen trade ties and arrive at a mutually beneficial outcome," said Ajai Sahay, director general, Fieo.

"India's footwear and leather sector is not a forced-labour risk, it is a formal, employment-intensive, women-inclusive and globally audited manufacturing sector. Any additional US tariff will punish compliant Indian MSMEs and workers, while weakening the China+1 sourcing opportunity that American buyers themselves are seeking," added Puran Dawar, chairman of Dawar Group, an Agra based leather goods exporter.

There is also talk of some exporters front-loading shipments to ensure that goods reach the US before the current 10% regime ends. "With the current longer route that ships have to take there is a 10-15-day window available," said an industry source.

For most Indian businesses, the going has been good since the US Supreme Court struck down the reciprocal tariffs in late Feb and a 10% uniform additional levy kicked in for all countries.

"We are seeing good demand from the US as there is a level-playing field. If the new tariffs are across the board, we do not have much to worry about as we can manage," said a leading garment player.

Unlike last year, when they had to deal with heft discounts to keep their business going, companies said, American buyers are absorbing the higher cost at the moment, which is being passed on to buyers. "Demand is not hit because of the higher prices," added another garment exporter.

While a bilateral trade deal is seen to be positive, most want govt to ensure comparative advantage over China, Vietnam and Bangladesh, at least when it comes to traditional sectors such as textiles and footwear.

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