FIEO expects stable 10–15% tariff regime once US trade pact is finalised

India is aiming for a more predictable tariff regime in its trade with the US as discussions on a bilateral trade agreement (BTA) continue. Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO), said, “We are looking into a kind of stable situation with India at a tariff of 10–15%.”Currently, about 55% of India’s exports – including textiles, gems and jewellery, leather, toys, handicrafts, chemicals, plastics and some engineering goods -face a 50% tariff from August 27. “Most of our competitors are having tariffs in the range of 15–20% and the difference of 30–35% will not be possible for the industry to bridge in,” Sahai said, warning that exports to the US could drop in September.

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He explained that countries such as Indonesia, Vietnam, the EU and the UK benefit from lower duties through bilateral trade agreements. “We are also engaged in the BTA with the US. Once the BTA is finalised, even this 25% will come down to 10–15% depending on the negotiation give and take,” he said. Part of the duty, linked to Russian oil imports, may also change with geopolitical developments.Talks are ongoing, though delayed. “The negotiator is supposed to be in India this week. They have not come. But we are hopeful that very soon they will come to a negotiating table,” Sahai said. He noted that both governments have set the fall of 2025 as the terminal date, giving time until October this year to make progress.

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For now, exporters have front-loaded shipments to the US, building inventories. However, if the 50% tariff continues, roughly $47-48 billion worth of exports could be at risk. “Had it been just a 25% tariff, it could have been managed. But we are not losing hope,” Sahai said. “Once the negotiation concludes, India will be in a much better position than many of our competing countries.”

For the full interview, watch the accompanying video

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