India's FIEO shows cautious optimism on US-China tariff truce

The Federation of Indian Export Organisations (FIEO) has expressed cautious optimism over the recent US-China tariff truce, stating both opportunities and competitive challenges for Indian exporters.

US has announced a reduction in tariffs on Chinese goods from 145 per cent to 30 per cent, while China will cut tariffs on US goods from 125 per cent to 10 per cent, both effective from May 14.

While welcoming the move as a positive step towards global trade stability, FIEO President Ashwani Kumar Ralhan highlighted potential challenges for India. The surge in US-China bilateral trade, especially in high-value sector could intensify competition for Indian exporters in key third markets such as Southeast Asia, Africa, and Latin America, where India has recently expanded its presence.

However, he pointed out that India remains well-positioned to boost exports in relatively insulated sectors. Ralhan also urged the Indian government to proactively negotiate with the US for expanded preferential trade access, positioning India as a reliable alternative sourcing destination.

The temporary nature of these tariff reductions presents an opportunity for India to attract manufacturing investments under the Make in India and Production Linked Incentive (PLI) schemes, particularly in electronics, auto components, and textiles, Ralhan said in a release.

FIEO assured that it will continue to work closely with policymakers to safeguard and promote India’s trade interests amid this shifting global landscape.

ALCHEMPro News Desk (HU)