<figure id="attachment_3075563" aria-describedby="caption-attachment-3075563" style="width: 1600px" class="wp-caption aligncenter"><img loading="lazy" class="wp-image-3075563 size-full" src="https://media.freemalaysiatoday.com/wp-content/uploads/2025/06/982b32cf-us-india-flag-1.jpg" alt="US India flag" width="1600" height="1000" /><figcaption id="caption-attachment-3075563" class="wp-caption-text">While India is not a manufacturing powerhouse, it still ran up a US$45.7 billion trade surplus with the US last year. (Reuters pic)</figcaption></figure>
MUMBAI: Indian exporters are anxiously eyeing the possible reintroduction of Donald Trump&#8217;s punishing tariffs next week, though many hold out hope for a last-minute reprieve.
The US president&#8217;s April 2 &#8220;Liberation Day&#8221; announcement of swingeing levies on dozens of key trading partners sent shockwaves through capitals before he announced a pause for negotiations, which ends next Wednesday.
New Delhi and Washington have been locked in multiple rounds of talks, with hopes for an interim pact to avert the 26% &#8220;reciprocal&#8221; tolls meted out to India.
The tariffs, which came on top of 10% levies across the board for every country, were imposed for what the White House says are unfair US trade deficits.
While India &#8211; the world&#8217;s most populous country &#8211; is not a manufacturing powerhouse, it still ran up a US$45.7 billion trade surplus with the US last year.
Now some of its most labour-intensive exports, including electronics, gems and jewellery and shrimp, are under threat.
Exporters are &#8220;optimistic&#8221; that India may be able to carve out a bilateral agreement on the &#8220;trade side at least&#8221;, Ajay Sahai, director general of the Federation of Indian Export Organisations, told AFP.
However, he added that it was &#8220;quite a fluid situation&#8221;, suggesting one outcome could see the deadline extended, given that India is &#8220;constructively engaged&#8221; with Washington.
&#8220;The feedback which I am getting suggests positive developments either way &#8211; and we are hopeful,&#8221; he added.
India&#8217;s seafood industry is seeing &#8220;some amount of anxiety&#8221;, but also &#8220;more reason for hope&#8221;, said KN Raghavan, secretary general, Seafood Exporters Association of India.
He did not give details, but said a &#8220;solution appears to be in the anvil&#8221;.
US officials have been upbeat about the prospect of an agreement.
Yesterday, Trump raised the possibility of an agreement, saying it is &#8220;going to be a different kind of a deal&#8221;.
&#8220;It’s going to be a deal where we&#8217;re able to go in and compete,&#8221; he added.
&#8220;Right now, India doesn’t accept anybody in. I think India is going to do that, and if they do that, we&#8217;re going to have a deal for much less tariffs,&#8221; he added.
His commerce secretary Howard Lutnick said last month that a pact could be expected in the &#8220;not too distant future&#8221;.
However, Indian media reports yesterday, quoting unnamed sources, struck a more neutral tone, saying negotiators were still working to resolve key differences that had cropped up during talks.
&#8216;Alternative sources&#8217; 
An Indian commerce ministry official told AFP that New Delhi&#8217;s unmet demands included relief from separate sectoral tariffs on steel and aluminium as well a greater access for labour-intensive exports including textiles and footwear.
They have also spoken of disagreements over Washington&#8217;s push to have India open up its agriculture sector and allow freer trade of American farm produce.
Finance minister Nirmala Sitharaman has said she was eager for a deal.
&#8220;I&#8217;d love to have an agreement, a big, good, beautiful one; why not?&#8221; she told India&#8217;s Financial Express newspaper, in an interview printed on Monday.
Sitharaman, however, added that &#8220;agriculture and dairy&#8221; are the &#8220;very big red lines&#8221;.
Experts believe a smaller agreement is still possible ahead of the deadline.
&#8220;The more likely outcome is a limited trade pact,&#8221; said Ajay Srivastava of Global Trade Research Initiative, a New Delhi-based think-tank in a recent note.
Srivastava said that under such a deal, India could cut tariffs on a range of industrial goods and offer limited access for US agricultural produce &#8211; in return for Trump dropping the 26% levies.
However, he also warned that talks &#8220;may collapse&#8221; if Washington &#8220;continues to insist on opening India&#8217;s core agriculture sectors or allowing entry of genetically modified organism (GMO) products&#8221;.
Seafood exporters remain on edge as talks go down to the wire.
&#8220;Currently, exporters believe they can manage with a 10% tariff, as it can be absorbed.
&#8220;However, if it goes back up to 25% to 30% levels, we could see American buyers finding alternative sources,&#8221; Raghavan said.
&#8220;They will find some other cheaper source,&#8221; he added.

MatchPoint Times

India exporters cautiously optimistic as US tariff deadline looms

Experts believe a smaller agreement is still possible ahead of the deadline.

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