Thiruvananthapuram: Exporters in Kerala are reacting to the latest U.S. trade policy changes with mixed feelings—some anxiety, but also a sense of opportunity.
Recently, President Donald Trump announced a steep 25% import duty on Indian goods, a significant increase. This tariff will start on August 28. It raises concerns that Indian products may become too expensive for U.S. consumers, making them less appealing compared to cheaper options from other nations. Yet, many exporters in Kerala hold a cautious optimism, viewing this as a chance to explore new markets.
Seafood Exporters Voice Worries
A key player in Kerala’s exports is seafood, which is vital to India’s $8 billion seafood market. The U.S. alone accounts for $3 billion of this. Seafood exporters, however, are particularly worried. An official from the Food Export Association said the new tariffs could hurt the seafood trade from Kochi.
Manoj Varghese of the Food Export Association pointed out that competition is fierce. Along with the 25% duty hike, Indian shrimp also faces additional taxes. Ecuador is now a strong competitor; it has kept its import duty at just 15%. Once the top shrimp exporter, India lost that status during the pandemic, and Ecuador has taken over for the last three years. Varghese emphasized that, with rising prices, Indian exporters might have to pull back from the U.S. market.
Concerns extend beyond shrimp. Fish like eel may now face a duty jump of 50%. Though other markets exist, the price struggle in the U.S. remains a critical issue for shrimp exporters.
Finding alternative domestic markets is not easy either. Fish is not a staple in northern states of India, despite changing eating habits in urban areas.
Cashew Exporters Remain Steady
The cashew industry in Kollam is showing more resilience. J. Rajmohan Pillai, a local industrialist, believes that the tariffs won’t impact their factories significantly. He highlighted that India already competes with countries like Vietnam and Brazil in the global cashew market.
Vietnam, which has a trade agreement with the U.S., faces a lower duty of 19%. Even with the added tariffs, India’s share of the U.S. cashew market is just 6%. While some firms producing specialized products for the U.S. may take a hit, there’s potential for re-exporting to other markets like Japan and Europe.
Garment Sector Seizes New Opportunities
The textile sector sees potential growth amid this turmoil. Sabu Jacob, Managing Director of Kitex Group, views the situation as a temporary disruption. He stated that rising tariffs will paradoxically impact U.S. consumers, likely driving prices up by 20-30%.
Jacob pointed out that India’s garment exports to the U.S. amount to less than ₹600 crore. By contrast, exports to the U.K. and Europe are substantial, thanks to favourable trade agreements. He believes that this scenario is an opportunity for Indian exporters to tap into these new markets without the burden of high tariffs.
Looking Ahead: Opportunities in Challenges
Across the board, exporters in Kerala acknowledge that while the U.S. tariffs create short-term problems, they also provide a chance to diversify their markets and lessen reliance on the U.S.
“Trump’s threat is just a threat,” shared one seafood exporter, echoing a sentiment of resilience. Although challenges may loom in the coming months, India’s export sector can strive to adapt and find stability, especially by leveraging new trade agreements.
As the landscape of international trade continues to shift, the capacity to adapt will be crucial for these exporters. Attention to market trends and strategic planning will be key for overcoming obstacles and seizing new opportunities in the global arena.
For more insights on rising tariffs and their effects, you can check the World Trade Organization’s report for further details.
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DOLAND TRUMP, EXPORTS, CASHEW AND GARMENTS, KERALA INDUSTRY, US TARIFF, US TARIFF: SEAFOOD VOICE CONCERN, CASHEW AND GARMENTS INDUSTRY LOOK FOR ALTERNATIVES
