The huge uncertainty regarding import duty or tariff in America has left India’s big exporters deeply worried. A big crisis has arisen in front of the traders associated with the textile, gems and jewelery and seafood sectors of the country. The situation is so serious that many suppliers have stopped the shipment of their goods bound for America. Until a clear picture emerges regarding trade rules and duty structure, Indian exporters are moving cautiously.
Court’s decision changed the whole game
In fact, the US Supreme Court completely rejected the tariff imposed under the ‘International Emergency Economic Powers Act’ (IEEPA). This decision raised questions over the legal validity of existing trade agreements. But the story does not end here. Just hours after this decision of the court, US President Donald Trump implemented a new global tariff under Section 122 of the ‘Trade Act 1974’. Earlier the rate of this new fee was being said to be 10 percent, but the very next day it was increased to 15 percent.
Crisis looms on shrimp, jewelery industry
The biggest impact of this uncertainty has been on India’s seafood and gems and jewelery industries. According to Gunturu Pawan Kumar, national president of Seafood Exporters Association of India, shrimp exporters have currently put brakes on shipments on the instructions of American buyers. There is a lot of confusion regarding the duty and no official clarification has been issued till now. All eyes are on the website of ‘Customs and Border Protection’ (CBP), where an update may come in the next few days. It is noteworthy that India’s largest agricultural export to America is prawns, which was worth 2.4 billion dollars in the last financial year. On the other hand, the gems and jewelery sector, which exports about 10 billion dollars, has also stopped its supply for at least a week. The industry believes that given India’s dominance in diamond exports, the sector can survive if rates remain stable, but right now traders are waiting for Trump’s next strategy.
Is the era of profitability over in the textile sector?
The clothing industry i.e. the textile sector also seems to be very cautious about this entire situation. Industry experts believe that these new tariff rates have almost eliminated the competitive advantage that was gained from a recent trade agreement with the US. Rahul Mehta, Chief Mentor of Clothing Manufacturers Association of India, says that business can run in difficult circumstances, but it becomes impossible to survive amidst uncertainty. Today every exporter is in a dilemma as to what next step to take. Earlier, where Indian exporters were expected to get an edge over other countries, now after the new tariff, everyone is seen standing in the same queue.