Exporters breathe sigh of relief on tariff pause

Industry players have adopted a 'wait-and-watch' mode

- SHREYA NANDI

There will be relief for some Indian exporters dealing exclusively with the American market because of Washington's decision to temporarily pause reciprocal tariffs for most countries.

On April 2, the United States (US) had announced imposing country-specific reciprocal tariffs, which were to come into force on April 9. With the decision to levy a 26 per cent reciprocal tariff on Indian imports, most American buyers had put orders on hold, forcing exporters to nearly stall production in some cases.

Owing to the sharp rise in the tariff, buyers were seeking deep discounts. On Wednesday, escalating the US-China trade war, American President Donald Trump announced a sharp 125 per cent tariff on all Chinese imports, while reversing the decision on reciprocal tariffs on other countries. The 90-day pause came because, according to Trump, over 75 countries had not retaliated and were in talks with the US.

The pause, and the imposition of a lower 10 per cent tariff from the earlier 26 per cent, will ensure that there will be at least no disruption in production and supply, said Ajay Sahai, director-general and chief executive officer, Federation of Indian Export Organisations.