Reciprocal levy: Working to remove additional US tariffs, says Piyush Goyal

Goyal advised Indian industry and exporters not to route outbound shipments to the United States (US) through countries with lower reciprocal tariffs imposed by Washington

Urging Indian industry and exporters not to panic in light of the sweeping reciprocal tariffs imposed by the United States, Commerce and Industry Minister Piyush Goyal on Wednesday said the government was working in a “proactive manner” and “exploring solutions” in the best interest of the nation.  

Speaking later at Rising Bharat Summit, Goyal said India was working with the US administration to remove the additional tariffs.  

After Goyal and top officials met representatives of the export promotion councils (EPCs) to deliberate on the risks and opportunities arising out of these tariffs, the commerce department said that the government will work to provide “a conducive environment” for them to successfully navigate the recent changes in the global trade environment.  

While complimenting exporters for achieving the highest export of above $820 billion in FY25 with a nearly 6 per cent annual growth, Goyal advised industry as well as exporters against routing outbound shipments to the United States (US) through countries with lower reciprocal tariffs imposed by Washington.

 

“Indian exporters were asked to remain vigilant and avoid letting other countries use India as a conduit to bypass higher tariffs imposed by the US,” people aware of the matter told Business Standard.

 

Speaking at a News18 event, Goyal elaborated on India’s engagement with the US administration to remove the 26 per cent tariff. “We believe that India was not one of those countries which really needed to have tariffs on them because we were already in engagement for a bilateral trade deal but the US has not differentiated. For every country, they have come out with a number. But we are in constant engagement. We will be working with them to take off these additional tariffs in the days to come.”

 

After his meeting with export promotion councils, Goyal said except one or two, most exporters are very excited. “They see good potential going forward. They are supporting our engagement with the US. Together, we will convert them into a great opportunity,” he said at the media event.  

 

Exporters told the minister that American buyers are reassessing existing orders, while seeking deep discounts, and it may not be possible for exporters to completely bear the cost. “In most of the cases, buyers are asking to absorb 50 per cent of the enhanced tariff, which may not be possible for many in the industry. Therefore, we need some support from the government,” an exporter said.

 

Since the interest equalisation scheme (IES) has not been operational from the beginning of the year, exporters urged the minister to restart the scheme at the earliest with an interest subvention of 5 per cent. They also asked to extend export boosting schemes such as Remission of Duties and Taxes on Exported Products (RoDTEP) and Rebate of State and Central Levies and Taxes (RoSCTL) beyond September.

 

Since some American buyers have put orders on hold, it has resulted in additional cost for exporters to maintain the inventory. “We have requested some soft lending from the banks. In the case of distressed sectors such as marine products, gems and jewellery, we have urged the government to look into restructuring of loans, if the need arises,” the person cited above said.