US action from today: India ready to face 50% tariff

NEW DELHI: India has intensified its preparations to overcome the crisis of the 25 percent additional penalty imposed by the United States on Indian products from today. The effort is to overcome the setback in exports to the United States by improving domestic consumption, finding new markets and attracting additional investment through Make in India.

Exports worth $48 billion (Rs 4.2 lakh crore) to the US are in crisis with the duty increasing to 50 percent. The US Department of Homeland Security has issued a notice stating that the additional duty imposed on India on account of the country's Russian oil imports will come into effect at 9.31 am today.

Prime Minister Narendra Modi's announcement to sharply reduce GST is to improve domestic consumption. Four slabs are being reduced to two. The GST Council meeting will be held in the first week of September for this. The effort is to create excitement for the festive shopping season in the country that begins with Onam.

Additional benefits will also be provided to exporters as a relief. The duty drawback limit was increased yesterday for the gem and jewellery sector, which is facing a major setback. Similar benefits may be announced for sectors including marine products.

The opportunities in markets like Europe, Africa, West Asia, and Latin America will be utilised. Negotiations are underway with more countries in continuation of the free trade agreement recently signed with the UK.

Reserve Bank to cut interest rates

The Monetary Policy Committee meeting to be held in the first week of October may reduce the key interest rate by half a percentage point to provide relief to exporters

Capital investment will be increased

Capital investment in infrastructure development will be significantly increased. The setback in the export sector can be overcome by increasing the availability of money in the market

Exports affected

Textiles, gems, jewelry, shrimp, carpets, leather, tires, machine parts, furniture, marine products

Indian companies will continue to buy oil from where they get the best deal

- Vinay Kumar

Indian Ambassador to Russia