Exporters write to Commerce Minister to ask US for deferment of reciprocal tariffs

Concerned about falling demand and stalled orders as the reciprocal tariffs announced by the US kick in, exporters are understood to have written to the government asking them to seek a deferment of the levies on India as negotiations of the bilateral trade agreement are underway.

“There is some advantage to India from the lower reciprocal tariffs but it is still early days. There is apprehension of contraction of demand. Some industry bodies and exporters have written to commerce and industry minister Piyush Goyal for some intervention so that the US may defer the tariffs on India,” said an industry stakeholder.

Following Prime Minister Narendra Modi’s visit to Washington DC where he met US President Donald Trump, India and the US plan to deepen bilateral trade to $500 billion by 2030 and are also negotiating a bilateral trade agreement, the first tranche of which is expected to be completed by fall 2025.

However, the US has slapped a 26% reciprocal tariff on India. While a 10% across the board levy is effective from April 5, the remaining 16% tariff comes into effect from April 9.

While remaining hopeful about the successful finalisation of the BTA in coming months, exporters are worried about the immediate fall out of the reciprocal tariffs and have already started reporting that about no or falling orders post April 9.

Several exporters have also reported that they have been asked by buyers to pay the duty differential, which they say is a difficult task for them. Commerce and industry minister Piyush Goyal has called a meeting with export promotion councils on April 9.

India exported $89.81 billion worth of goods to the U.S. (Trade Data as reported by USA). As per a new report by the Global Trade Research Initiative, these exports could decline by approximately $5.76 billion—a drop of 6.41%—as a result of the new trade measures in 2025.

“Several key product groups are likely to see reductions,” it noted.

Exports of fish and crustaceans may fall by 20.2%, iron or steel articles by 18.0%, and diamonds, gold, and related products by 15.3%. Vehicle and parts exports are projected to drop by 12.1%, while electrical, telecom, and electronic products may decline by 12.0%. Other categories such as plastics and articles thereof (-9.4%), carpets (-6.3%), petroleum products (-5.2%), organic chemicals (-2.2%), and machinery (-2.0%) are also expected to be negatively impacted, as per the report.