Trump's Reciprocal Tariff: India to Neither be Safe Haven Nor Source of Trade Diversion, Govt Tells Exporters

The Ministry of Trade and Commerce has cautioned Indian exporters not to be impulsive and rush to make any decisions in response to reciprocal tariffs. The government has particularly cautioned the exporters that in this period of uncertainty, India needs to refrain itself from either being a source of trade diversion or a safe haven for trade diversion. The Ministry believes that the exporters also need to come out of their comfort zone and make themselves more competitive.

“We have cautioned exporters not to rush to decision. India will neither be a source of trade diversion nor a safe haven for trade diversion,” said an official source.

The Ministry of Commerce had a meeting with the Indian exporters on April 9 to discuss the challenges that several sectors could face due to reciprocal tariffs. The government has encouraged the exporters get rid of protectionist measures for their benefit in the long run. Exporters have been advised to look outward in terms of trade and explore opportunities for tapping the global market.

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“Protectionist measures safeguard a few thousands but cost 1.4 billion Indians as they breed inefficiency in the sector,” said the official source. However, exporters have been assured that the government will be taking all precautionary measures to ensure that Indian exporters don’t get affected due to trade diversions. For instance, customs have been given special instructions to flag if there is any abnormal surge in exports or imports to ensure India isn't used for trade diversion by other countries.

To further aim the Indian exporters to navigate the trade challenges arising due to global uncertainties, the Department of Commerce and DGFT have launched a ‘Global Tariff and Trade Helpdesk’ to monitor trade shifts amid rising tariffs and import surges. The initiative aims to support exporters and importers facing regulatory, logistical, or financial challenges and will coordinate with other agencies to resolve trade-related issues.

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U.S. President Donald Trump has paused a segment of his sweeping tariff measures for 90 days, offering time for negotiations on trade barriers. While easing duties on several nations, he simultaneously raised tariffs on Chinese imports to 125%. Previously on April 2, he had announced reciprocal tariffs ranging from 10% to 49% on goods from around 60 countries, including additional 26% duties targeting India.