All orders going to America were halted after tariff hike, traders appealed to central government to intervene

Whatever the long-term effect of the Trump administration's reciprocal tariff announcement, American employment-based sector orders in items such as garments and leathers are on hold indefinitely. American buyers are also seeking to suspend shipment of pending orders temporarily, say exporters.

Both importers and exporters are eager to know what will happen.Indian exporters would like the government to engage in talks with the US government over the 26 percent retaliatory tariff levied on India and to seek postponement until a bilateral trade agreement (BTA) is signed between India and the US.

On the other hand, Vietnam has declared to fully scrap the duty on American products after the announcement of the reciprocal duty. Reciprocal duty of 46 percent was levied on Vietnam. Now Vietnam is likely to get a considerable relief in duty from America. The Apparel Export Promotion Council has submitted a letter to the government asking it to negotiate with America to defer the reciprocal duty.

Amidst all this, American buyers are demanding a discount of 10-26 percent in the delivery price from Indian exporters. However, Indian exporters of the garment and leather sector say that due to heavy competition from many countries in the US market, we already work on low margins, so there is no scope to give discounts to American buyers.

American buyers are demanding discounts:

• Chairman of Council for Leather Export, R.K. Jalan said that some buyers are demanding discounts of up to 26 percent in the price. We work on a margin of 6-7 percent, so we can give a maximum discount of 2.5-3 percent. Mithileshwar Thakur, general secretary of Apparel Export Promotion Council, said that some big exporters can give some discount to American buyers, but it is not possible for the rest.
• Some American buyers are also threatening to cancel old orders if discounts are not given. He said that right now all new and old orders are stalled. Something can be said about exports only after the next few weeks. Apparel exporter and former president of Federation of Indian Export Organizations A. Sakthivel said that nothing is clear right now. We have requested the government to talk to the Trump government about the duty.
• A situation is also emerging that India's talks on Bilateral Trade Agreement (BTA) with America have started and the first phase of the agreement will be reached by September-October. With the BTA, such duties on many items will be abolished.

Sanjay Jain, former president of Confederation of Indian Textile Industries (CITI), said that given the stance of the Trump government, we expect a reduction in the announced duty. Therefore, American buyers are also not talking about trade right now. In the year 2024, India exported textiles worth $ 10.5 billion to the US. Leather items worth about one billion dollars are exported to the US.

After the imposition of reciprocal duty, goods going to the US from India and other countries will become expensive. Due to this, US retail customers will refrain from shopping. To avoid this situation, US importers are demanding concessions in price, so that it puts less burden on US customers and their business continues.