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The hefty 50 per cent tariffs on Indian imports set by US President Donald Trump has been imposed on the goods starting from Wednesday. This comes weeks after the US president announced an additional 25 per cent tariff and the negotiation that yielded nothing for New Delhi.
As soon as the tariffs have kicked in, it has incurred the loss of 2.17 lakh crore to the Indian exporters across ten sectors.
With this, many sectors have stopped production and many are looking for ways to get minimum impact from this move. The products which have been impacted include, Textile, Leather products, Marine, chemicals, steel, dairy, machinery among others.
Speaking to Tehelka on the challenges and how the exporters are shielding themselves from this crisis, Raghunandan Saraf, Founder and CEO of Saraf Furniture said that exporters in the furniture sector are compelled to shift their strategy and moving towards cost-effective sourcing, raw material procurement and value engineering to maintain competitiveness.
“The furniture sector, which already functions on slender margins and protracted production timelines, has now been complicated further by the 50 per cent tariff on exports to the US. Additionally, exporters are adopting measures to insulate themselves from immediate impacts by optimizing supply chains. These measures include more cost-effective sourcing, raw material procurement, and value engineering to maintain competitiveness. A portion of exports is also being diverted to the Middle East, Europe, and Australia to reduce dependence on the US market,” Saraf told Tehelka.
He said that the hurdles, however, are quite sizeable. Furniture has always been bulky and freight intensive, contributing to high logistics costs, which, combined with the added US tariffs now present a daunting challenge.
“This burden, added to the terms mid-sized exporters face with overseas buyers, is especially problematic. Time, investment, and market understanding are hurdles no one can achieve overnight. The uncertainty surrounding the duration of the tariffs has created a reluctance to devise long-term plans. Adaptability has always been a hallmark of the sector, but the current scenario exposes the limits of endurance and emphasizes the need to strike a compromise between enduring immediate hardships and long-term restructuring of trade relations,” he added.
Meanwhile, The Federation of Indian Export Organisations (FIEO) President SC Ralhan said that the move will severely disrupt the flow of Indian goods to its largest export market.
He described the development as a setback and adds that it can severely impact India’s exports to the US, with approximately 55 per cent of India’s US-bound shipments (worth USD 47–48 billion) now exposed to pricing disadvantages of 30–35 per cent, rendering them uncompetitive in comparison to its competitors from China, Vietnam, Cambodia, Philippines and other Southeast and South Asian countries.
