US tariff shock jolts Punjab exporters
With the new import duty set to take effect from August 7, industrialists say buyers may stop placing new orders and shift to countries like Vietnam, Bangladesh, Pakistan and Turkey where goods will be cheaper due to lower tariffs.
It is also expected to make importers hold back on placing new orders, say industrialists.
Industries in Punjab export yarn, textiles, hand tools, agri and tractor parts to the US, among other products.
'The tariffs announced by the US President are not just disappointing but very worrying,' said Amit Thapar of Ganga Acrowools Limited in Ludhiana, which exports yarn to the US.
Thapar, who is also the chairman of CII's (Northern Region) export committee, said, 'Textile exports worth approximately $10.05 billion were made from India to the US last year and this year till May, the exports have already grown by 13 %.'
Punjab contributes a significant 28% to India's total textile export of $36 billion.
'But the problem now facing the industry in the state is lower tariffs on competing countries like Turkey (15%), Vietnam (20%), Pakistan (19%), Bangladesh (20%) and Sri Lanka (20%), all lower than India. This puts Indian exporters at a huge disadvantage. Buyers have been calling us. We will start holding meetings to chart the future path amid uncertainty. I hope the situation improves,' he added.
SC Ralhan, president, Federation of Indian Export Organisations (FIEO), who is the managing director of Ludhiana-based Sri Tool industries, said the tariffs were a major setback for the hand tools industry in Punjab that annually exports machinery worth ₹3,000 crore to the US.
'Our government is negotiating with exporters on this front. They are likely to compensate us, but if the tariff is implemented, it will be a huge setback. Countries like Vietnam and Turkey are set to benefit straight away,' he said.
Upkar Singh Ahuja, president, Chamber of Commercial and Industrial Undertakings (CICU), said the industry in Punjab will be adversely hit, as besides textiles, hand tools machinery and auto parts were exported in huge quantities to the US. 'We are hopeful that the Indian government will provide a respite soon,' he said.
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