Indian Exporters Face Challenges in Securing US Tariff Refunds Despite Improved Pricing Power
Indian exporters may not get US tariff refunds, but pricing power improves
Business Standard
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Indian exporters are unlikely to receive a share of the $166 billion in US tariff refunds, despite being linked to approximately $12 billion of that total. However, the rollback of tariffs has improved their pricing power and order prospects, particularly in textiles and apparel, which are the largest contributors to the refund pool.
- 01Indian exporters linked to about $12 billion in US tariff refunds.
- 02Textiles and apparel account for roughly $4 billion of the refunds.
- 03US Supreme Court ruling deemed previous tariffs unlawful, triggering refunds.
- 04Exporters regain pricing power, reducing the need for steep discounts.
- 05Increased inquiries from US buyers signal potential for future orders.
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Indian exporters are facing challenges in claiming a portion of the $166 billion in tariff refunds from the United States, despite being linked to about $12 billion of that total. The refunds primarily stem from a ruling by the US Supreme Court that deemed tariffs imposed under the International Emergency Economic Powers Act (IEEPA) unlawful. Textiles and apparel, which make up roughly $4 billion of the refunds, are the largest contributors. While US importers will directly benefit from these refunds, Indian exporters are seeing improved pricing power, allowing them to reduce discounts previously necessary to remain competitive. Tariff rates had escalated to 50% before being reduced to 18% following negotiations. With inquiries from US buyers increasing, exporters are optimistic about future orders, particularly for upcoming seasons. Experts suggest that Indian exporters should engage with US buyers to negotiate terms that could include sharing the tariff refunds, especially for contracts priced on a duty-paid basis.
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Indian exporters may see increased order volumes due to improved pricing power, which could positively affect their revenue and employment levels.
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