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Hindustan Times
2 days ago
- Business
- Hindustan Times
India, US trade talks hit a speed bump
The latest round of in-person trade negotiations between the India and US concluded in New Delhi on Tuesday with progress on multiple fronts but without significant breakthrough on tariff issues, people aware of the matter told HT, identifying recent 'protectionist' measures by Washington to slap 50% duties on steel and aluminium and its stance on the 10% baseline tariff on all imports as hurdles. The extended six-day negotiation round, which saw the American delegation stay longer than initially planned, highlighted the complex nature of the discussions as both countries race to reach an agreement before the July 9 deadline when additional US tariffs are set to take effect. An American negotiating team led by assistant US trade representative Brendan Lynch arrived in Delhi on June 4 to hold face-to-face negotiations with the Indian team led by special secretary Rajesh Agrawal. This was the fourth time the two sides met at one of the capitals and there was no announcement on Tuesday on whether they had set another in-person meeting. Washington wants duty-free access for American goods, while India is willing to slash duties on most American products to near zero, provided the US reciprocates unequivocally, the people said, requesting anonymity because of sensitivities involved. 'The negotiations held with the US side were productive and helped in making progress towards crafting a mutually beneficial and balanced agreement including through achievement of early wins,' one person said. India outlined three main tariff-related asks for forging an early harvest deal before July 9: the US withdraw its threat of imposing another 16% reciprocal tariff on Indian goods after July 8, repeal safeguard measures against Indian steel, aluminium, automobiles and auto components, and revoke the 10% reciprocal tariff on Indian goods imposed on imports from 57 countries from April 5. 'India is willing to substantially reduce its MFN rates for American goods through the proposed BTA to address its trade deficit concern. Ideally, the US should also reciprocate by reducing MFN rates. Least it could withdraw all additional tariff and non-tariff measures against Indian goods shipped to America,' a second person said. According to World Trade Organisation rules, the Most Favoured Nation tariff is applicable to all its 166 members alike. Two countries can, however, reduce MFN rates under bilateral preferential trade arrangements such as free trade agreements. While doubling safeguard duties on steel and aluminium to 50% over MFN rates under section 232 from June 4, the Trump administration spared the UK. For the UK, the levy remained at 25% because the two countries agreed to a US-UK Economic Prosperity Deal, the person said. 'Ideally, the US should also exempt India along with the UK because India was engaged with the United States for a bilateral deal much before President Trump's 'Liberation Day' tariff announcements on April 2,' this person added. On April 2, Trump announced Liberation Day tariffs—a 10% baseline tariff on all imports effective from April 5 and country-specific reciprocal duties of 16% for India, which is suspended until July 8. Indian exporters face practical difficulties under current US tariff structures. 'Indian goods, including handicraft items having parts made of steel or aluminium separately attract a 50% tariff. It is difficult to segregate metal components from any product and calculate two different tariff rates. This is an additional compliance burden, which also needs to be addressed through these talks,' one person said. Like Washington, New Delhi is keen to conclude an early deal and forge a BTA, but it must be 'mutually beneficial' as agreed by Prime Minister Narendra Modi and President Donald Trump on February 13. 'Besides, the US' tariff measures are already under legal scrutiny. Although a federal appeals court reinstated the tariff measure, it is temporary. Even under Section 122 of the US Trade Act of 1974, the President has the authority to impose temporary tariffs or quotas for up to 150 days only. Any extension beyond that would require legislative approval,' the second person said. Indian negotiators emphasised existing goodwill measures taken by New Delhi. 'Despite all these, India is not only willing to cut tariffs on the majority of American imports, but has also reduced duties on several items such as bourbon whiskey and motorcycles. It has already repealed the 6% Google Tax (equalisation levy) and recently approved entry of Elon Musk's satellite internet service Starlink. These are more than goodwill gestures and America must factor them while negotiating a trade deal with India,' the second person added.
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Business Standard
21-05-2025
- Business
- Business Standard
Pharma shares in focus; GSK, Jubilant, Eris, Gland, Torrent rally up to 8%
Shares of pharmaceutical companies were in demand, and rallied up to 8 per cent on the bourses in Wednesday's intra-day trade on healthy growth outlook. In-line March quarter performance, coupled with Torrent Pharma and Gland Pharma's optimistic FY26 guidance led the up move in pharma stocks. GlaxoSmithKline Pharmaceuticals (GSK Pharma), Ajanta Pharma, Gland Pharma, Jubilant Pharmova, Torrent Pharmaceuticals, Natco Pharma, Aurobindo Pharma, Lupin, Ipca Labs, Dr Reddy's Laboratories, Cipla, Divi's Laboratories, Granules India and Sun Pharmaceutical were up in the range of 2 per cent to 8 per cent in intra-day trade. At 09:52 AM; the Nifty Pharma, the top gainer among sectoral indices, was up 1.6 per cent, as compared to 0.56 per cent rise in the Nifty 50. The pharma index rallied 2.3 per cent in intra-day trade today. The Indian pharmaceutical market (IPM) reported growth of 7.4 per cent year-on-year (YoY) in April 2025 on a base of 9.5 per cent YoY growth in April 2024. IPM growth in Moving Annual Turnover (MAT) April 2025 stood at 7.9 per cent YoY versus 7.3 per cent YoY growth in MAT April 2024, with volumes contributing 130 bps, much higher than the nil contribution in MAT April 2024. India Ratings and Research (Ind-Ra), part of the Fitch Group, said the continued revenue growth was driven by companies' price hikes, with volume growing 1.3 per cent year-on-year (YoY). 'India Ratings expects IPM to grow 7-8 per cent YoY during the financial year 2025-26 (FY26) with sustained growth momentum in the chronic therapies, led by price increases and product launches', said Nishith Sanghvi, director, corporate ratings, India Ratings. Kotak Institutional Equities highlights that, although pricing contributed to the bulk of the growth, volume traction in the end-market still remains sluggish. However, the brokerage firm expects a slightly stronger acute season along with pricing, acquisitions and in-licensing deals to drive 10 per cent-23 per cent YoY growth in FY2026E domestic sales for its coverage. ALSO READ | Meanwhile, Ind-Ra opines the executive order to reduce the prices of prescription drugs in the US, once implemented, will have limited near-term impact on the Indian pharma companies, but it may have a bearing on their long-term capital allocation strategies. According to media reports, on 12 May 2025, the US President declared that he would be signing an executive order that would reduce the prices of prescription drug and pharmaceutical products' prices by 30 per cent to 80 per cent. Additionally, the executive order would establish a Most Favoured Nation Policy whereby the US would pay the same price as the country that pays the lowest price anywhere in the world. Jubilant Pharmova said the large innovator pharma companies, for their US requirements, are now looking to create an alternate manufacturing site in the US as a risk management measure in the event of tariff imposed by the US government. Therefore, the company is starting to see excellent traction in the Contract Development and Manufacturing Organization (CDMO) Sterile Injectable business for new lines in the Spokane facility. The company expects to reach peak utilisation for Line 3 in 3 years from start of commercial production vs 4 years, expected earlier. Among individual stocks, GSK Pharma soared 8 per cent to ₹ 3,012.20 in intra-day trade. The management said the company remains committed to delivering sustained above-market growth and strong shareholder returns. In FY2025-26, GSK Pharma will continue to focus on its innovative portfolio through the launch of oncology assets. The company said it is on track to launch Zejula (Niraparib), a PARP inhibitor for ovarian cancer and Jemperli (Dostarlimab), an immunotherapy approved for the second-line treatment of endometrial cancer. In January to March 2025 quarter (Q4FY25), Torrent Pharma's domestic business continued to post strong double-digit growth despite the slowdown in the overall market. Growth in the US business has started to show signs of a pickup. Meanwhile, the management of Gland Pharma named a few additional growth drivers for the medium term. These include complex injectables for the US market, biosimilar CDMO business in India and GLP-1 CDMO in Cenexi. The company has already entered into agreements with Dr Reddy's Labs in India and another pharma company in China for biosimilar CDMO.
CNA
01-05-2025
- Business
- CNA
Commentary: Why importing more will not save Thailand from Trump's tariffs
BANGKOK: US President Donald Trump's 'Liberation Day' tariffs is a nightmare for trade-oriented economies, including Thailand. In response, the Thai government has prioritised increasing imports from the US and diversifying export markets. While the 90-day pause of tariff escalation offers significant relief, it risks fostering complacency, as the government's current approach may prove inadequate. The new US tariffs come as a shock to many for two key reasons. First, it imposes tariffs on imports from nearly all countries. Second, the tariff rates are substantial when compared to the US' current Most Favoured Nation (MFN) weighted average. Thailand now faces a 36 per cent tariff. Cambodia faces a 49 per cent tariff, Laos 48 per cent and Vietnam 46 per cent. Even with the 90-day pause in tariff escalation announced on Apr 9, a new minimum rate of 10 per cent remains in effect for goods imported from all countries. The impact will be especially severe for trade-dependent developing countries like Thailand. Since the late 1970s, trade has driven rapid economic growth and structural transformation in Thailand, shifting labour from agriculture to manufacturing and services. A distinctive feature of Thailand's trade regime is its ability to create jobs through labour-intensive manufacturing exports. Since 1990, liberal trade and investment policies, along with lower transport and communication costs, have deepened Thailand's integration into global value chains. Today, the country is a major hub for the automobile and electronics industries. THAILAND VULNERABLE TO US POLICY SHIFTS Against this backdrop, Trump's tariff hikes will have a major impact on Thailand's economy. The US is its largest export market, accounting for about 17 per cent of total exports. Thailand has long maintained a trade surplus with the US, and exports remained strong even during the COVID-19 pandemic, highlighting their deep economic ties. As Sino-US trade frictions intensified, many goods exported from Thailand to the US between 2018 and 2022 were products which had been previously sourced from China. This includes electronics appliances, air conditioners, hard disk drives, photosensitive semiconductors and image sensors. More importantly, Thailand is heavily reliant on the US market for many products. My calculations show that around 10 per cent of Thai exports shipped to the US derive over 50 per cent of their total export value from the US market. This group spans a wide range of products, including new pneumatic tyres, refrigerators and photosensitive semiconductor devices. This heavy reliance makes Thailand highly vulnerable to US policy shifts, regulatory changes, and broader economic disruptions. Similar to other developing countries such as Vietnam and Indonesia, the Thai government has turned to increasing imports from the US. Whether a more balanced trade relationship is a meaningful objective is another matter, but increasing imports alone is unlike to significantly improve Thailand's position. This is because Trump's concern over the trade deficit may not just be about the numbers, but more fundamentally about trade barriers. Just days before Trump announced the 'Liberation Day' tariffs, the Office of the United States Trade Representative released the 2025 National Trade Estimate Report on Foreign Trade Barriers. The report outlines measures and policies of about 60 trading partners that restrict, prevent, or hinder the international exchange of goods and services. For Thailand, trade barriers include both tariffs (particularly on agricultural goods) and non-tariff barriers such as import bans, licensing requirements, tariff-rate quotas, import permit fees, and a controversial incentive system for customs officials who initiate investigations or enforcement actions. Additionally, technical barriers to trade remain in place for many products, for instance, dairy products, animal-derived products, and beef. Though Thailand is not alone in maintaining these trade barriers, they appear more problematic when considered alongside the growing trade imbalance between Thailand and the US over the past decade, which stands out both in its scale and pace of growth. All this suggests that simply importing more from the US is unlikely to resolve the deeper trade friction between the two countries. LIMITS TO DIVERSIFICATION Should the Thai government, then, consider export diversification alongside its effort to increase imports from the US? Given the size and depth of the US market, it remains unclear how much Thailand can, or should, diversify away from it. Diversification involves more than just finding new buyers outside the US; it requires a broader reconfiguration of global supply chains to reduce dependency and enhance resilience. This is particularly relevant for Thai exporters engaged in original equipment manufacturing (OEM), such as those producing photosensitive devices and image sensors. These firms often operate under contract for large multinational brands, supplying highly specialised components within tightly integrated global value chains. These manufacturers often tie producers closely to a few dominant lead firms. This limits the flexibility of Thai exporters to pivot toward new markets. Expanding free trade agreements (FTAs) has been one approach. Thailand currently has 15 FTAs in place with partners. Multilateral frameworks like ASEAN and the Regional Comprehensive Economic Partnership further boost export potential by widening market access and enhancing regional integration. New agreements with blocs like the Pacific Alliance and the Southern Common Market (also known as MERCOSUR) also hold promise. However, signing more FTAs comes with its own set of challenges. For businesses, complying with rules of origin requirements can be costly and complex, potentially limiting the practical benefits of expanded trade deals. While expanding FTAs offers significant opportunities for market access and economic growth, addressing the complexities of compliance and ensuring that businesses can fully capitalise on these agreements will be crucial to their success. The Thai government must go beyond a short-term plan and mobilise resources to address non-tariff barriers, reconfigure supply chains, and enhance the competitiveness of the private sector. This includes targeted fiscal policies, research and development investment, and regulatory reform. Without a cohesive strategy, Thailand risks losing its competitive edge in global value chains and facing long-term disruption.
