NEW DELHI: It’s going to be an all-nighter for several officers in the commerce department as they keep the spreadsheets ready on their computers to assess how US President Donald Trump’s reciprocal tariffs impact Indian exporters and businesses.
A war room has been set up by the department in Vanijya Bhawan, with senior officers also part of it, sources said. The idea is also to ensure that there is no panic and a preliminary assessment is done early.
Even businesses will be keeping tabs on the announcements made by Trump from White House’s Rose Garden, especially with goods in transit and orders for the next six months in the pipeline. Besides, they will have to calculate how their goods would compare with those of rivals.
Given Trump’s multiple and often contradictory statements, it is unclear how the tariffs would play out. Govt as well as businesses are unsure if he intends to focus on countries, products segments or specific products.
While govt is hoping that India will earn a reprieve, given that the two sides are negotiating a bilateral trade deal, White House has asserted that there will be no exceptions.
The assessment in govt circles, however, is that the impact will be temporary and will also depend on how Trump imposes duties on other countries, especially for products where India has large shipments to the US.
Exporters are, however, worried that there could be a dent on their margins and give American buyers more bargaining power. “Most businesses are working on the assumption that tariffs could in be in the 10-15% range,” said an industry source. But these are all guesses with no one sure of what is in store.
A steep increase in levies could also have an impact on investment plans, especially for new manufacturing units, that some investors were contemplating as Trump is pushing American companies to invest at home. With many economists predicting weaker economic activity due to an expected increase in prices in the US, companies may be wary to step out and are expected to be cautious till the impact is fully visible.
