Synopsis : The Federation of Indian Export Organisations (FIEO) has said the newly imposed 10% US tariff on Indian imports will raise the landed cost of Indian goods in the American market, but its overall impact should be assessed in comparison with competing exporting nations.
While the tariff may increase costs for exporters, India remains relatively well-positioned as several key competitors face even higher tariffs, allowing Indian products to retain their competitive advantage in many sectors.
US Announces 10% Tariff on Indian Goods
The United States has imposed a 10% tariff on imports from India and 16 other countries as part of measures aimed at addressing concerns over the use of forced labour in global supply chains.
The move is expected to increase the landed cost of Indian products entering the US market, making exports relatively more expensive for American buyers.
However, exporters believe the broader impact should be viewed in the context of tariffs imposed on competing countries rather than focusing solely on the headline tariff rate.
FIEO Urges a Balanced Perspective
The Federation of Indian Export Organisations (FIEO) has advised exporters to avoid drawing immediate conclusions based only on the additional tariff.
According to SC Ralhan, President of FIEO, although the new duty will increase costs, India has secured a comparatively favourable position in the global export landscape.
He noted that India has been placed in the 10% tariff category, while several major competing export economies face an even higher 12.5% tariff.
India Gains Relative Advantage Over Several Competitors
FIEO highlighted that a number of India's competing export nations have been subjected to higher US tariff rates.
Countries facing 12.5% tariffs include:
- China
- Vietnam
- Thailand
- Türkiye
- United Arab Emirates (UAE)
- Brazil
- South Africa
- Several other competing exporters
This comparatively lower tariff could help Indian exporters maintain stronger pricing competitiveness in the US market.
Labour-Intensive Sectors Remain Competitive
FIEO also pointed out that many countries competing directly with India in labour-intensive industries have been placed in the same 10% tariff bracket.
These include:
- Bangladesh
- Cambodia
- Pakistan
- Sri Lanka
- Indonesia
- Malaysia
Since these countries face an identical tariff burden, Indian exporters are expected to retain their relative competitiveness in sectors such as:
- Textiles
- Garments
- Leather
- Footwear
This means Indian manufacturers are unlikely to lose significant market share solely because of the tariff.
Product-Wise Assessment Recommended
Rather than reacting broadly to the tariff announcement, FIEO has advised exporters to conduct a detailed product-specific evaluation.
Exporters have been encouraged to assess:
- The applicable US tariff for each product.
- Whether any tariff exclusions are available.
- The duty structure applicable to competing supplier countries.
- The overall pricing competitiveness of their exports.
A product-level strategy, according to FIEO, will help businesses make informed decisions instead of assuming a uniform impact across all export categories.
What This Means for Indian Exporters
Although the additional tariff is likely to increase export costs, India's competitive position remains relatively stable because many rival exporting nations are facing similar or even higher duties.
Businesses operating in labour-intensive industries may experience limited disruption, while exporters in specialised product categories should carefully review tariff classifications and available exemptions before revising pricing strategies.
Outlook
Industry experts believe the immediate impact of the US tariff will vary across sectors and product categories. While exporters may face short-term pricing pressure, India's relatively favourable tariff position compared with several competing economies could help preserve its export competitiveness.
Going forward, Indian exporters are expected to closely monitor developments in US trade policy, evaluate product-specific tariff implications, and explore opportunities to strengthen market presence through efficiency, value addition, and diversified export strategies.
Disclaimer : This article is for informational purposes only and should not be considered trade, legal, or financial advice. Businesses should refer to official government notifications and consult trade professionals before making export or commercial decisions.
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