India’s exports to the U.S. slumped in September amid elevated tariffs - BofA
Investing.com - Exports to the United States from India sank by 12% in September on an annualized basis, reflecting a spike in U.S. tariffs on goods sent out of the South Asian country.
President Donald Trump placed additional levies on India’s exported items earlier this year, as part of a bid to put pressure on New Delhi over its purchases of Russian oil.
U.S. tariff rates on a slew of Indian products now stands at 50%, with the White House also pointing to a need to correct for what it claims are imbalances linked high Indian duties on American goods.
However, Trump has recently moved to soften his tone on India, suggesting that the country’s Prime Minister, Narendra Modi, has pledged to ratchet down Russian crude purchases.
On Monday, Trump added that "at some point" the heightened U.S. tariffs on India will be brought down, suggesting an agreement could be forged "that’s good for everybody."
Indian officials are also cautiously optimistic that a deal with Washington will eventually be reached, Bloomberg News reported, adding that talks are progressing well.
In a study, analysts at BofA Securities found "broad-based weakness" in the amount of several Indian products exported to the U.S. in September, the first full month since Trump’s increased levies took effect. Textiles, gems, pharmaceuticals and chemicals were among some of the most deeply impacted sectors.
However, the data showed that, while exports to the U.S. came down, "India saw [...] exports diversifying to other trading partners," such as Hong Kong, Bangladesh, and the United Arab Emirates.
The BofA analysts including Rahul Bajoria and Smriti Mehra said there has been a "growing degree of comfort in the evolving macroeconomic scenario" for India, "with the negative around U.S. trade issues likely on a firm path of resolution but without a clearly defined timeline."
Trump’s tariffs have had only a "limited impact" on the wider Indian economy as well, the analysts said.
