Friday, January 24, 2025

India can get additional exports of $25bn following US tariff wars, says FIEO

C Shivakumar @ Chennai:
After US President Donald Trump proposed tariff hikes on foreign goods, a Federation of Indian Exports Organisation (FIEO) study has stated that India can get an additional export of around $25 billion in lieu of tariff war in sectors such as electronics and electricals,  automotive parts and components, organic chemicals,  apparel and textiles, footwear, furniture and home decor and toys.

Israr Ahmed, vice-president of Federation of Indian exports Organisation (FIEO) told The New Indian Express that Indian government should allocate additional corpus fund of Rs 250 crore into Market Access scheme which will focus on United States for next three years.

"We require increasing our presence in the US with showcasing in a large  number of exhibitions, buyer sellers meet and tie up with large local associations  of retailers and distributors in the US with proactive support of the Government. We want India to be an alternative for US consumers following tariff duties imposed on competitors," he said.

Ahmed said that India stands to benefit from Trump's announcement of levying tarrifs on foreign imports as it will impact countries like China, Canada and Mexico more than India.

However,, the textiles sector is cautious and says any tariff hike could impact the exporters in Tiruppur. The Tirupur cluster, a prominent MSME sector, comprises over 2,000 exporters and 20,000 MSME units, contributes approximately 55% of India's knitwear exports. President of Tiruppur  Exporters Association K M Subramanian told TNIE that. "Indian textiles are the most preferred in the United States and we hope there will be no tariff imposed on Indian Textiles in lieu of good ties between President Trump and Prime Minister Narendra Modi."

Meanwhile, exporters have urged Finance Minister Nirmala Seetharaman to continue Interest Equalisation Scheme (IES), which is providing a level playing field to exporters, with a cap of Rs 10 crore per exporter. The demand comes as inflation is increasing the cost of inputs and the freight rates are still high. The exports during the operation of IES between 2015-2024 grew at a CAGR of 6.6 % as against merchandise trade growth of 4.4%.  India’s non -oil exports are still growing despite global challenges. Interest Equalisation Scheme has  helped exporters to obtain orders giving very less profit ,  which could have been lost but for the interest equalization scheme, exporters said.

A tax deduction of 200% to 250% has been sought for research and development spending under section 35(2AB) of the Income Tax Act.as R&D is  required for almost all sectors but is more crucial for the sunrise sectors which will be the new driver of exports

Ahmed said that exports has been flat despite geopolitical tensions which is quite significant when compared to other nations.


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