Imposition of a 50% tariff by America is affecting the Textile, Steel, Footwear, garments, steel, agriculture products, auto parts, steel and Pharma industry in Haryana. Among severe sufferers include Panipat, Gurugram and Faridabad exporters
Chandigarh: From 27 August, a 50% tariff has been imposed on goods exported from India to the US hitting Haryana exporters hard due to its major share in exports. Industries likely to be most affected include textiles and garments, footwear, auto parts, steel, engineering, agriculture, and pharma. According to exporters from Panipat, The textile sector will face the biggest impact. Apart from this, the US is the largest market for Indian auto parts, adversely affecting the manufacturers from Gurugram, Faridabad, Sonipat, Rohtak and Rewari’s Bawal and Dharuhera. Information reveals, earlier, cars, small trucks and their parts were having 25% duty, while commercial vehicle parts had 10% and such a huge hike in tariff would adversely affect exports to US. According to Pawan Yadav, President of Manesar Industries Association, 32% of India’s auto parts exports went to the US last year, with higher tariffs, exports could be severely hit in future.
Sources reveal, Gurugram alone accounts for 10% of India’s exports to the US. The new tariffs may also affect Hisar’s steel and aviation, Karnal’s basmati rice, Panipat’s textiles, Ambala’s scientific equipment, and Rohtak’s nut-bolt and Bahadurgarh footwears industry. Information also reveals that Gurugram’s Garments, Pharma and Automobile Industry alone will be affected by 25,000 crore annually. President Pawan Yadav Manesar Industry Association said Gurugram’s industries are likely to face losses worth Rs 25,000 crore due to the 50% US tariff, since out of 400 garment exporters over 150 depend on the US. Former Gurugram Industries Association President, JN Mangla while talking to The Financial World said that orders have stopped for 10 days, existing ones have been cancelled, production halted, and without alternatives, mass layoffs may follow.
Sources further reveal, Hisar’s steel and aviation sectors may be hit, presently doing annual exports worth Rs 10.53 crore may get stuck. Under a pact with Haryana, the US Trade and Development Agency (USTDA) was to invest Rs 10.53 crore ($1.25 million) in developing Hisar Airport and the Integrated Aviation Hub. Now there are concerns the agency may withdraw or the project may face hurdles. Vinod Dhamija, Chairman of HCCI Panipat Chapter, said the new tariffs will badly hit textiles. Panipat exports worth over Rs 12,000 crore to the US annually, including Rs 1,500 crore during Christmas facing crisis, since about 30% of orders are stalled, and with demand for cushion covers, towels, curtains, and durries are being shifted by US buyers to Bangladesh, Pakistan, or Vietnam.
The decision will have 1-1.5% impact on basmati exports from Karnal, All India Rice Exporters Association Chief Satish Goyal stated that US takes 4.5% of India’s 6 million tonnes export which equates to an impact of 1-1.5%, manageable by diverting to other markets. He said, this is not a big impact, adding that rice exporters of Haryana can sell this rice in other countries as well, and alternatives are being explored. He said, initially, there will be some impact initially, but we are not seeing a very big impact on food and drink items He said however 50 percent export is expected to remain but we will search alternate markets. MSME member Vijay Harjai stated a direct loss risk of Rs 4,000 crore after tariffs increase, since the prices will rise significantly causing customers to turn to other countries. He said that LPS Bossard alone supplies Rs 200 crore worth nuts and bolts for US air defence systems. A leading exporter from Ambala Scientific Equipment Dr. Anil Jain said that Rs 500-600 crore exports is likely to be affected, 25% of orders hit, cancellations rising depending on the new enhanced tariff by the US. Jain further added that the impact will be clearer once it is known under which category the US places scientific equipment. Jain said, about four million dollars’ worth of scientific equipment is exported from Ambala annually and several export orders have been started cancellrd by US importers.
Sources reveal, few industry leaders have met Finance Minister Nirmala Sitharaman, highlighting challenges from tariff hikes, including loss of market in US, competitiveness, and affect to employment opportunities sought support. However, the minister assured exporters of full government support to protect trade interests and livelihoods.
