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India Today
16 minutes ago
- India Today
Kanpur leather industry hit by US tariff hike, Rs 2,000 crore exports stalled
Kanpur's leather industry, a major export hub, is staring at a severe crisis after the United States sharply increased import duties on Indian leather goods to 60%—double the rate imposed on China and far higher than Pakistan (19%) and Bangladesh (20%). Exporters fear the move could wipe out nearly all of Kanpur's annual Rs 2,000 crore leather exports to the SAY BUYERS BACKING OUTJafar Iqbal, a Kanpur-based exporter and factory owner, said shipments have been halted as American buyers withdraw from contracts. 'In May, when tariffs were 10%, we agreed to bear half the cost to retain orders. Now, with the new rates, neither side can afford it. Five of our containers are ready, but we don't know what to do,' he told India Today BLOW FOR THE INDUSTRYNaiyar Jamal, another exporter, said the sector was already struggling under environmental regulations such as Namami Gange before being hit by the tariff hike. Despite mounting losses, he expressed support for the government's stance against US trade TO 10 LAKH JOBS Leather trader Javed Iqbal warned the tariff hike could devastate Kanpur and neighbouring Unnao, where the industry employs nearly 10 lakh people. Lower tariffs for Pakistan, China, Vietnam, and Cambodia are expected to draw away American buyers. 'We stand with the government, even if it means bearing heavy losses in the national interest,' he HALTED DESPITE FESTIVE ORDERSPrerna Verma, a leather accessories exporter, said confusion over the new policy has brought production to a near standstill. Demand in recent years has already fallen to 60% of previous levels, forcing some units to lay off Iraqi, Chairman of the Council for Leather Exports (Central Region), said that although Christmas orders have arrived, production for the US market has been halted. He met Commerce Minister Piyush Goyal in Delhi two to three days ago, where the government discussed possible relief measures—such as interest subsidies—in the case of a 25% tariff. However, with the import duty now set at 50%, such measures are unlikely to suffice. 'Buyers and sellers can manage an extra 5–10% cost but such a steep hike is beyond anyone's capacity," he said.- EndsTune InMust Watch
Economic Times
19 minutes ago
- Economic Times
Banks tighten scrutiny on overseas investments amid falling net FDI
Agencies Representative Image Mumbai: Indian businesses are facing a higher scrutiny from banks on overseas direct investments (ODIs). Companies moving funds abroad are being inundated with questions on the business rationale of the offshore venture and its viability.A company can invest up to four times its net worth in an ODI. A closer examination of such offshore fund deployment by the banks comes at a time when there has been a dramatic fall in the net foreign direct investment (FDI), which fell over 96% in 2024-25. Net FDI is gross FDI net of ODI and repatriation by foreign investors. Besides fund repatriation, an increase in ODI contributed to the drop in net FDI. Under the circumstances, a number of authorised dealer (AD) banks, which handle the cross-border transfer of money, are reluctant to approve transactions which do not pass muster. Among the financial institutions at least three large private sector banks have been particularly demanding."When it comes to outward remittance transactions, we have lately seen a rise in instances where AD banks are requesting chartered accountant certifications to verify the factual accuracy of varied specific details in cases under their processing. This cautious approach may be attributable to the liberalisation of regulations, resulting in fewer cases being referred to the Reserve Bank of India (RBI) or to the greater responsibility being placed on the banks by the regulator before it accepts their recommendations in approval-related matters," said Harshal Bhuta, partner at the CA firm P. R. Bhuta & Co which specialises in taxation and foreign exchange related regulations. Another reason for leading banks to looks into ODI proposals could stem from the greater freedom since mid-2022 to write-off foreign investments which turned out to be standard details like memorandum of association of the Indian entity, ID of authorised representative, shareholding of the foreign investee company, documents related to its incorporation, and share subscription agreement, banks are asking for undertaking from the resident and non-resident entity on the line of business activity of the overseas entity along with a CA or CPA certificate confirming the correct business activity, profile of the applicant indicating justification for investment abroad, project feasibility report, mentioning why the ODI is being done, profitability, business viability, future projections, business rationale for making remittance. According to Moin Ladha, partner at the law firm Khaitan & Co, "Such information is requested to assess the commercial substance of the transaction and ensure that the proposed investment is bona fide in nature. Accordingly, entities contemplating an overseas investment should approach the process with a clear, well-prepared plan and have all necessary supporting documents ready." This proactive approach not only facilitates timely regulatory approvals but also helps in demonstrating the legitimacy and commercial rationale of the investment to the AD bank, said Ladha. Rajesh Shah, partner at Jayantilal Thakkar & Co, a CA and advisory firm, said even when an ODI is for bona fide purpose, the AD banks are making sure that the fund remittance is used for the right purpose. "We have seen AD banks asking for end-use of remittance made from India, and probably because RBI wants a strict monitoring," said circles said there are cases where the regulator has put a question on transfer towards meeting outstanding expenses in an ODI venture-- asking banks how they had ascertained that services were actually 2022 when the overseas investment regulations were changed, investing companies have to give a declaration confirming that the capital instrument they were subscribing to were in the nature of equity shares and would be fully and compulsorily convertible into equities. (Join our ETNRI WhatsApp channel for all the latest updates) Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Regulatory gray area makes investing in LVMH, BP tough For Indian retail How IDBI banker landed plush Delhi properties in Amtek's INR33k crore skimming As 50% US tariff looms, 6 key steps that can safeguard Indian economy Jane Street blow pushes Indian quants to ancient Greek idea to thrive Stock Radar: Astra Microwave showing signs of bottoming out after 16% fall from highs; time to buy? F&O Radar | Deploy Broken Wing in Paytm to play stock's bullish outlook These 9 banking stocks can give more than 28% returns in 1 year, according to analysts Why 2025 Could Be The Astrological Turning Point We've Been Waiting For
News18
26 minutes ago
- News18
US is now Tariff King of the world: Former diplomat Vikas Swarup
New Delhi [India], August 14 (ANI): Noting that India has done the 'right thing" by not caving in to the Trump administration's pressure in trade talks to provide more access to the country's agriculture and dairy sectors, former diplomat Vikas Swarup has said 'the US called India a 'Tariff King' but now the 'Tariff King' in the world is the United States".In an interview with ANI, Vikas Swarup, who is a former High Commissioner to Canada, said steps being taken by the US President Donald Trump will eventually lead to ratcheting up inflation in America. 'US called India a 'Tariff King'. But now the 'Tariff King' in the world is the United States because our average tariff is about 15.98%. The US tariff today is 18.4%. So, it is now the 'Tariff King' of the world. But the fact is, tariffs are bringing in money. They will bring in about a 100 billion dollars a year for the US. But the issue is that eventually who will pay for these tariffs? By American consumers. So, what's going to happen is this is going to ratchet up inflation in America, it's going to ratchet up prices in America. I think that's when the chickens will come home to roost," he said.'If you cave in to a bully then the bully will increase his demands. Then there will be even more demands. So, I think we have done the right thing. India is too large, too proud a country to become a camp follower of any other country. Our strategic autonomy has been the bedrock of our foreign policy right from the 1950s. I don't think that any Govt in Delhi can compromise on that," says former diplomat Vikas Swarup on the tariff rift between India and the US," he added. President Trump announced 25 per cent tariffs on Indian goods plus an unspecified penalty in July, even as there were hopes of an interim India-US trade deal that would have otherwise helped avoid elevated tariffs. A few days later, he imposed another 25 per cent tariff, taking the total to 50 per cent, over India's imports of Russian Opposition questioning India's Foreign Policy and diplomacy, Vikas Swarup said India should not cave in to any pressure as India's strategic autonomy is non-negotiable'Here, I would not blame our diplomats at all. I think what has happened is Pakistan, through some intermediaries, has gotten the ear of the US President and that is why, two visits by Asim Munir to Washington, the so-called 'deal" with America on so-called 'oil reserves" of Pakistan. More importantly, I think Pakistan is now trying to position itself as the 'Crypto King' of South Asia and there, through World Liberty Financial in which Trump's family has stakes, Steve Witkoff's family has a stake, through that I think Pakistan has managed to project an image of itself as a reliable partner…All these things have led to Trump having a softer approach towards Pakistan," he said. 'But that does not mean that he has given up on India or that India is now an adversary for him. I think this is part of his pressure tactics to secure a more favourable deal. India should not cave in because our strategic autonomy is non-negotiable," he Swarup, a noted author, said Trump has made no secret of his longing for the Nobel Peace Prize and while he is a dealmaker, he has now made it his USP that he is the peacemaker.'On 50% tariffs imposed by the US on India, former diplomat Vikas Swarup says, 'Trump is a dealmaker and he has now made it his USP that he is the peacemaker. Look at the number of conflict situations that he has mediated in, whether it is Thailand and Combodia, Rawanda and Democratic Republic of Congo, Armenia and Azerbaijan; he has injected himself into each of those. He feels that the biggest one of these was the India and Pakistan one because these two are nuclear powers," Vikas Swarup said. 'So, from that point of view, Trump feels that he deserves credit and Obama is the only Amercian President to have got the Nobel Peace Prize. Trump really wants to do one better than Obama, and that is why, I think, he has made no secret of his longing for that Nobel Peace Prize. He is hoping that if he could not get it for these, if he has able to bring about a ceasefire between Russia and Ukraine, then that might be his ticket to the Nobel Peace Prize," he former diplomat said that there is a need to look at the US' relationship with Pakistan through a different lens from the US' relationship with India. 'I think the relationship with Pakistan right now is a very tactical one and is a short-term one, primarily motivated by the financial gain that the Trump family and Witkoff family hope to make from the cryptocurrency assets in Pakistan. With India, I think, the relationship is much more strategic. It is not so transactional as it is with Pakistan. That is why I personally feel that it is a passing phase. I call it a storm, not a rupture. You just have to wait out the storms. All storms eventually pass," he said there are three reasons US President Donald Trump has imposed 50 per cent tariffs on Indian goods including his 'being miffed that India has not acknowledged his role" in cessation of hostilities with Pakistan following Operation Sindoor, former diplomat Vikas Swarup has said, noting that if there is positive outcome of Alaska talks, Russia sanctions will be off the table.'We have to understand why these tariffs have been imposed. I personally feel that there are three reasons. One, Trump is not happy with India because we are a member of BRICS and somehow, in his head, he has got this notion that BRICS is an anti-America alliance which is hell-bent on creating an alternative currency to the dollar. So, because of that, he feels that India should not be a member of the BRICS. Two, Operation Sindoor and his so-called role in bringing about the ceasefire," Vikas Swarup said.'We have been saying right from the beginning that Trump had no role because we do not accept external mediation. This ceasefire was mediated directly between the DGMOs of Pakistan and India at the request of the DGMO of Pakistan. Trump has now said almost 30 times that it was he who got the two countries to stop back from the brink, who stopped a nuclear conflagration in the subcontinent. So, obviously he is miffed that India has not acknowledged his role, whereas Pakistan has not only acknowledged his role but has even nominated him for a Nobel Peace Prize," he to Bilateral Trade Agreement (BTA) talks between India and US, Vikas Swarup said Trump is resorting to pressure tactics to get India to sign on his maximalist demands.'…This is part of his pressure tactics to get India to sign on the dotted line on the maximalist demands that the US is making with regard to access to our dairy and agriculture and GM Crops. We have not caved in and it is also in a way a signal to Russia because he is also frustrated that he has not been able to get President Putin to agree to the ceasefire that Zelenskyy has agreed to," he Swarup referred to the summit meeting between President Trump and President Putin in Alaska on August 15 over the Ukraine conflict.'Now they are meeting in Alaska on 15th August. If there is a positive outcome of the Alaska talks then I am 100% sure that the Russia sanctions will be off the table because Putin is not going to accept a ceasefire and yet be saddled with economic sanctions," he and the US initiated talks for a just, balanced, and mutually beneficial Bilateral Trade Agreement (BTA) in March this year, aiming to complete the first stage of the Agreement by October-November April 2, 2025, President Trump signed an executive order for reciprocal tariffs on various trade partners, imposing varied tariffs in the range of 10-50 per subsequently kept the tariffs in abeyance for 90 days, while imposing a 10 per cent baseline tariff. The deadline was to end on July 9, and the US administration later pushed it to August the ongoing Monsoon session of Parliament, Commerce and Industry Minister Piyush Goyal made a statement in both Houses, affirming that the government is examining the impact of tariffs and will take all necessary steps to safeguard the national interest. (ANI)
