Is the high cost of tariffs on Russian oil balanced by its low price, as claimed by some experts? Find out their insights here.
India's seafood export industry is bracing for tough times as the Trump tariffs, particularly affecting shrimp exports valued at nearly $2 billion, take effect from August 27. The 50% tariff, an escalation from the existing 25% tariffs, is expected to have significant negative impacts on various Indian export sectors, including seafood.
For seafood exports, the increased tariffs directly raise the cost of Indian seafood products in the U.S. market, making them less competitive against suppliers from other countries. This could lead to a reduction in demand from U.S. buyers, loss of market share, and potential financial stress on exporters and associated workers.
The Indian government is aware of the challenges and is considering targeted support measures to cushion key export sectors from this impact. The government is reportedly exploring sector-specific relief plans to shield vulnerable industries from the fallout of these tariffs.
The tariffs reflect broader trade tensions and uncertainty around the U.S.-India bilateral trade agreement negotiations, further complicating export prospects. Nobel laureate economist Abhijit Banerjee has urged India to reconsider importing cheap Russian oil at the cost of high tariffs from the United States, suggesting that India could ask the U.S. if tariffs would be lifted in exchange for stopping Russian oil imports.
The economy, as a whole, is also feeling the strain. Abhijit Banerjee described the current year's economy as "not as good as expected", citing geopolitical tensions and trade uncertainties. Weak private investment and pressure on the middle class are issues currently facing the economy.
Major companies like TCS are not hiring, and IT salaries are stagnant, according to Banerjee. The Seafood Exporters Association of India (SEAI) has appealed to the commerce and finance ministries for urgent financial assistance. The SEAI has requested a 30% increase in working capital through subsidised soft loans and a 240-day moratorium on pre- and post-packing operations.
The total tariffs on Indian products entering the United States will now reach 50%, one of the highest levied by the Trump administration on any country. There are fears that these steep tariffs will threaten Indian exports worth approximately $27 billion to the United States.
In fiscal year 2024-25, India imported 88 million tons of oil from Russia, accounting for 36% of its total crude oil imports. Discussions on reducing Russian crude purchases are already underway in policy circles, but refiners have placed no orders for August or September, as discounts on Black Sea oil have dropped to about $2 per barrel.
In conclusion, the 50% tariff imposed by the United States on Indian exports is likely to have significant negative impacts on various Indian export sectors, particularly seafood exports. The Indian government is aware of the challenges and is considering targeted support measures to cushion key export sectors from this impact. The economy, as a whole, is also feeling the strain, with weak private investment and pressure on the middle class. The current year's economy, as described by Nobel laureate economist Abhijit Banerjee, is "not as good as expected", citing geopolitical tensions and trade uncertainties.
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