Govt cautions exporters against diverting third-country goods to US as trade war heats up
NEW DELHI : The government on Wednesday assured industry that it would closely monitor imports to prevent the dumping of goods from foreign countries but cautioned Indian exporters against the temptation to reroute third-country goods through India — a move that may provoke US ire and jeopardise ongoing trade negotiations with Washington, The Indian Express has learned.
This comes as the US has imposed cumulative tariffs of up to 125 per cent on Chinese imports, raising concerns over dumping, with Chinese exporters expected to seek alternative markets amidst high inventory levels across sectors — particularly steel, automobiles, electrical products, machinery, and computers. The US was China’s largest export destination.
At a meeting with exporters chaired by Commerce Minister Shri Piyush Goyal on Wednesday, government officials also said they were exploring ways to provide soft loans to support exporters amid rising global trade uncertainty. This follows concerns raised by several sectors — especially apparel, gems, and jewellery — over tight margins and the potential impact of ongoing global disruptions.
“The government has assured exporters that a number of quality control orders may be eased for countries like the European Union, UK, and US, as India has relatively few quality concerns with imports from these regions,” a person familiar with the meeting said.
Meanwhile, Shri Goyal urged exporters not to panic and assured them that India is pursuing the “right mix and right balance” in its proposed trade agreement with the US. He emphasised that the Indian negotiating team is working with “speed” but “not in undue haste” to ensure the best outcome for the country.
India and the US are currently negotiating a bilateral trade agreement (BTA) aimed at more than doubling bilateral trade from the current level of approximately $191 billion to $500 billion by 2023. The first phase of the deal is targeted for conclusion by autumn (September–October) this year.
“The minister assured exporters that the country is working proactively and exploring solutions in the national interest. The team working on the BTA is seeking the right balance, and he encouraged exporters to remain optimistic and focus on the silver lining in the current global environment,” an official statement noted.
Shri Goyal also observed that different countries are responding to tariffs in varying ways.
“However, as far as India is concerned, there is potential for increased manufacturing and job creation, as India could attract major players in the global supply chain. The country has established itself as a trusted and reliable partner and a predictable, business-friendly destination,” he said.
The meeting was convened to discuss the potential impact and emerging opportunities from the evolving global trade landscape, and to brief industry on the government’s actions.
Notably, China announced that it would raise tariffs on a wide range of US goods to 84 per cent starting Thursday — a sharp escalation from the previously announced 34 per cent— according to a statement issued by the country’s finance ministry on Wednesday.
The move comes in direct retaliation to US President Donald Trump’s sweeping 125 per cent tariff on Chinese imports, effected 9th April.
China has pledged “resolute and forceful” countermeasures. The new tariffs form part of a broader package targeting 60 countries and officially came into effect just after midnight US time on Wednesday. At a daily press briefing, Chinese Foreign Ministry spokesperson Lin Jian strongly condemned Washington’s actions.
Trump had initially imposed a 34 per cent tariff on Chinese goods, which was met with equivalent retaliation from Beijing. The US then imposed an additional 50 per cent in duties. Combined with earlier levies introduced in February and March, the total tariff burden on Chinese imports under Trump’s second term now stands at 125 per cent, fuelling fears of an effective trade embargo.
Source : The Indian Express