India Engaged with US, Working Closely with Industry to Mitigate Tariff Impact: Govt Tells Parliament

The Indian government informed Parliament that it is actively engaged with the United States to address concerns arising from the recent US tariff announcements and is simultaneously working with domestic industry stakeholders to minimise the adverse impact on Indian exports.

Replying to a question in the Rajya Sabha, Minister of State for Commerce and Industry, Shri Jitin Prasada, said the government is in continuous dialogue with the US administration on trade-related matters, including the proposed tariffs.

Key Points from the Government’s Statement:

• India has taken up the issue of recently announced US tariffs at multiple levels, including through the India-US Trade Policy Forum (TPF) and senior official engagements.
• The government is working on both diplomatic and domestic fronts to protect Indian exporters.
• Focus sectors include textiles, pharmaceuticals, auto components, gems & jewellery, and engineering goods, which are likely to be affected by the new tariff regime.
• The Centre is consulting industry associations such as FIEO, CII, FICCI, and sector-specific bodies to assess the impact and prepare a mitigation strategy.
• Efforts are underway to fast-track the finalisation of the proposed India-US mini trade package to secure better market access and tariff relief.

Background

The US had recently imposed a 10% universal baseline tariff on imports from all countries, while maintaining higher tariffs on certain nations. Although the earlier emergency tariffs on India (18%) were struck down by the US Supreme Court, the new 10% baseline tariff has still created uncertainty for Indian exporters.

Government’s Strategy

According to the minister, India’s approach includes:

• Seeking exemptions or lower tariff rates for labour-intensive and strategically important sectors.
• Exploring alternative markets to diversify exports.
• Providing domestic support measures such as enhanced RoDTEP rates, interest equalisation schemes, and export credit guarantees for affected sectors.

The minister assured the House that “no effort is being spared” to protect Indian trade interests and that the government remains committed to a balanced and mutually beneficial trade relationship with the United States.

Market Reaction

Following the statement, shares of export-oriented companies in textiles, pharma, and auto ancillaries saw mild recovery in afternoon trade. However, analysts cautioned that clarity will emerge only after the final contours of the India-US trade package are known.