Indian exporters pin hopes on Russia after 50% US tariffs

Amid the current geopolitical conflict, the issue has become a triangular one between India, the United States, and Russia. India has been buying crude oil from Russia at discounted prices. Facing multiple US sanctions, Russia found India a reliable and large buyer of its crude oil. India has not only benefitted but also secured protection from global energy market volatility during the Ukraine-Russia war. Until 2024, there was no objection from the US, but President Donald Trump is now blaming India for indirectly funding the war.

Following the imposition of 50 per cent tariffs, Indian exporters believe that Russian crude oil imports are the primary reason for the hike. They argue that the Indian government should find a solution by offering relief, possibly through Russian cooperation.

Sanjay K Jain, chairman of the ICC National Textiles Committee and MD of TT Ltd, told Fibre2Fashion, “As the steep additional tariff has been imposed due to buying from Russia, we should urgently request Russia to give duty-free access to all the impacted industries. Cotton duty-free import will bring down costs of different items by 1–5 per cent depending on cotton’s share in a product, as international cotton is available at 10 per cent lower than Indian cotton. While this may not be enough to scale the tariff wall, it will surely support exporters in other markets and reduce losses for US shipments.”

Currently, import duties on Indian garment and textile exports to Russia generally fall between 5 and 15 per cent under standard MFN rates, with most goods facing an average duty of 9–10 per cent.

Lalit Goyal, chairman of the Handloom Export Promotion Council and President of the Panipat Exporters’ Association, said, “Our government should talk to Russia not only for duty-free access but also for simplification of consignment clearance at Russian ports.” He noted that exporters face tough scrutiny even for sample packets.

There are indications that the government is considering financial support for affected exporters. However, the industry has a simple expectation: that relief should come from the savings made on cheaper Russian oil. Jain had earlier said the government should have no difficulty in extending such relief. The Indian garment and textile industry, he stressed, is suffering because of the Russian crude oil imports that have continued for several years.

ALCHEMPro News Desk (KUL)