Daily News - Wednesday, 13 August 2025

Tariffs to make exporting to US unviable for India Inc: Crisil Ratings (The Economic Times)

A Crisil report has warned that the US decision to impose an additional 25 per cent tariff on Indian goods over its purchase of Russian oil will make exports to the American market largely unviable, especially for sectors like diamond polishing, shrimp, home textiles, carpets, ready-made garments, chemicals, agrochemicals, capital goods, and solar panel manufacturing that have high US exposure. The agency noted that the scale of impact will depend on each sector’s reliance on US trade, ability to pass on costs, and how Indian exporters’ tariff position compares with competitors, pointing out that diamond polishers could suffer from already weak natural diamond demand while shrimp exporters, who earn nearly half their revenue from the US, will now face the world’s highest tax rate for the product, losing ground to lower-tariff rivals like Ecuador. While potential bilateral trade agreements, government support, and strong corporate balance sheets may soften the blow, Crisil cautioned that disparate global tariff changes and a slowdown in US demand could reshape trade dynamics, with the US currently accounting for 20 per cent of India’s merchandise exports and 2 per cent of GDP. 

⁠Govt should flag EUDR as non-tariff barrier at WTO: Parliamentary panel to govt (The Economic Times)

⁠A parliamentary standing committee has urged the government to challenge the EU’s Anti-Deforestation Regulation at the WTO, calling it a non-tariff barrier, while also recommending that future FTAs safeguard the interests of Indian spice farmers and exporters even as they open new market opportunities. It noted that although the EUDR compliance deadline has been extended to 2026, giving coffee growers time to adapt, the mechanism is still being developed, and timely adherence will be crucial for protecting market access and sustaining growth in sectors like rubber. In a separate report, the committee called for stronger promotion of the ‘Make in India’ brand for traditional leather goods such as Kolhapuri chappals to enhance global recognition, protect artisan rights, and prevent misuse or imitation by foreign brands.

⁠US tariff impact to depend on comparative tariffs on India’s competitors: Government to Parliament (The Economic Times)

The government told Parliament that the impact of recent American tariffs on Indian exports will vary by sector depending on how they compare with tariffs faced by competitor countries, and said it is working with stakeholders to mitigate the effects through export promotion, diversification, and ongoing India-US bilateral trade agreement negotiations that have already seen five rounds since March 2025. It noted that while the US has imposed additional tariffs on imports from all countries since January 2025 for reasons ranging from trade deficits to border security, none have been linked to BRICS membership, and India is also actively pursuing trade talks with ASEAN, reviewing the AITIGA pact, and adopting a calibrated approach to FTAs to balance market access with domestic protection. Alongside these measures, the government is advancing a draft National Retail Trade Policy to ease compliance and boost credit access, promoting foreign investment through pacts like the India-UAE FTA, and developing an Export Promotion Mission with built-in monitoring to ensure transparency and tangible benefits for farmers, workers, entrepreneurs, MSMEs, and exporters.

China loosens urea exports to India in sign of thawing tensions (The Economic Times)

China has eased restrictions on urea exports to India for the first time in years, potentially allowing shipments of up to 300,000 tons and signaling a gradual thaw in relations between the two nations after a period of deep tensions since the 2020 border clashes. The move comes as the US has doubled tariffs on Indian goods to 50% over its purchases of Russian oil, prompting closer engagement between Beijing and New Delhi, which has also recently resumed tourist visas for Chinese nationals and may see Prime Minister Modi meet President Xi Jinping later this month. While the initial shipment volume is modest compared to India’s annual urea imports of 5.7 million tons, it could grow into a meaningful trade flow that eases global supply tightness, stabilizes domestic availability for India’s large farm sector, and helps control prices for this heavily subsidized crop nutrient.

UK trade pact offers big opportunity for Indian textile exporters amid US tariffs: Official (The Economic Times)

⁠India’s new free trade pact with the UK, signed on July 24, will immediately remove duty disadvantages and allow Indian textiles, garments, carpets, home décor, and handicrafts to enter the UK market duty-free, potentially doubling India’s market share from 6% to 12% and adding USD 1.1–1.2 billion in annual exports. Industry experts say Indian exporters should seize this opportunity to tap into Britain’s USD 27 billion textile import market, especially now that the US has imposed 25% tariffs on Indian goods from August 7, with another 25% due on August 27, making the UK a more attractive destination for shipments. Overall, the agreement could drive a 30–45% surge in India’s textile exports to the UK by 2030, worth an extra USD 500–800 million, while also strengthening competitiveness against key rivals like China, Bangladesh, and Turkiye.