Piyush Goyal Addresses Concerns Over U.S. Tariffs and Export Outlook
- Piyush Goyal said steps are being taken to tackle US tariffs through export diversification, boosting domestic demand, and quick GST reforms.
- India’s low export share 2 percent and import-driven economy mean limited impact from tariffs, Goyal said, citing past resilience.
- India eyes FTAs with Oman, EU, Australia, and deeper trade ties with Africa in cars, dairy, gold, and petroleum.
The government is determined to ensure industry does not encounter challenges in coping with the situation arising out of some unilateral steps, commerce and industry minister Piyush Goyal said in his first public statement since the entire 50 percent tariff that the US imposed on India kicked in this week.
Efforts are in progress to increase exports diversification and stimulate domestic demand, Goyal said at an event in the national capital. He attempted to dispel fears that the economy will suffer due to the impact of tariffs, stating that there is little reason to worry since India's contribution to world exports is modest at 2 percent and it is an import-based economy. The minister also stated that negotiations were on with the US for a bilateral trade deal.
"I would request all of you to identify which among your sectors have been impacted; which among your sectors require alternative markets", Goyal said during the curtain raiser ceremony of the Bharat Buildcon exhibition, further stating: "since we, in the commerce ministry, through the missions, are making efforts to reach out to other parts of the world to see other opportunities which we can take advantage of".
Support efforts to industry also involve increasing domestic consumption, the minister added. "You will see the Goods & Services Tax Council meet next week, as soon as next week, so that the effect of these changes (proposed to GST rates) can reach all of you very quickly, and that can provide a big demand booster to the whole domestic manufacturing sector", he added.
The GST Council in its coming meeting on September 3-4 will take into consideration reforms to the indirect tax system. The suggestions aim to make the tax system simpler, expected to minimize the cost to the consumer and thereby increase consumption and the economy. The minister added that people from different sectors have presented information on how it will affect them (tarriffs) during his meetings, but no one has ventured to complain. "Koi accha FTA karna chaahe toh uske liye hum sadaiv tayyar hain. Par kisi bhi prakaar ka bhedbhaav…hum na toh kabhi jhukenge, na kamzor honge (We are always prepared if someone wants to do a good FTA. But we will neither bend nor be weak if someone discriminates)", he said, adding that India will gain new markets.
While radiating confidence that India's exports in the current year will be more than last year's, Goyal also made it clear that India is not an export-dependent nation. "India's exports percentage of global market is very minor, we do not need to fear. India is an import-dependent economy", he stated. Indian industry has been able to tackle a pandemic like Covid and nuclear sanctions, he said.
"After these, if India's GDP gets affected by 2 percent and even in that, 40 percent items are not included (by the tariffs). Otherwise, there are sectors like gems & jewellery where value addition is not more than 3-5 percent", he said.
Goyal also proposed importing such products from African nations that are aggrieved by third-country actions. At the CII India-Africa Business conclave, he indicated that India can export motor cars and dairy products to Africa and in return, Africa can export diamonds, gold, petroleum products, farm products, pulses and lentils.
"Perhaps some of your businesses are affected by third-country actions, and we can bring those products from you into India", Goyal said. He added that India and Africa should consider doubling bilateral trade by 2030 to the present $82 billion and enhance cooperation in sectors such as critical minerals, agriculture, technology and manufacturing.
Goyal added that an FTA with Oman will be concluded shortly and Qatar and Saudi Arabia also wish to enter into trade agreements with India. Negotiations with the European Union for an FTA are proceeding at a rapid pace, the minister added. Commerce secretary Sunil Barthwal is traveling to the EU and their minister and officials will visit India subsequently, he added. "We would like to do a second tranche of FTA with Australia. Negotiations with New Zealand, Chile and Peru are under way at a fast pace", he said.
