Higher levy on China silver lining for India

The US tariff action on Thursday may hit India's shrimp and gold jewellery exports but it may provide significant opportunities to certain labour-intensive sectors such as electronics and textiles, even as both sides are negotiating tariff and non-tariff issues expeditiously under the framework of bilateral trade agreement (BTA), four officials and industry experts said.

- Rajeev Jayaswal

The imposition of a 27% tariff (10% from April 5 and the rest from April 9) in addition to basic customs duty other than on goods exempt, such as pharmaceuticals, or on which a different tariff has been levied, such as automobiles--will affect various sectors differently, they added.

For example, India's gold jewellery exports to the US will hit because the Middle East will have about 17% duty advantage over India. But, on diamond and silver jewellery, India will have a 10% advantage over Thailand, the people said, requesting anonymity.

Thailand has attracted 37% retaliatory tariff from the US.

Although the 27% additional duty is very high, in global trade, everything is relative, the people explained. India may have an advantage in footwear, textile, chemicals and plastic -- with exports from countries that traditionally send these to the US becoming far more expensive -but the gains in some sectors will be offset by losses in others. For example, Indian carpets may lose out to Turkey's (the country attracted only a 10% tariff), Indian garments will have duty disadvantage as compared to those from European countries and, on shrimp exports, India will lose to Ecuador (10%), the people said.