U.S. tariffs will have long-term effect on commerce: Commerce Ministry to PAC

The larger tariffs imposed on Indian items by American President Donald Trump would have a long-term influence, particularly for India’s marine exports, officers of the Union Ministry of Commerce advised the Public Accounts Committee (PAC) headed by senior Congress chief Okay.C. Venugopal.

The PAC met to deliberate the ‘Performance audit report on the Export Promotion Capital Goods Scheme.

There were several questions on the impact of U.S. tariffs on Indian exports. Rajesh Agarwal, Special Secretary, Department of Commerce, maintained that anxiety over the adverse impact on the Indian pharmaceutical sector was unfounded, since India’s key competitor on this sector was China, which was additionally reeling beneath comparable tariffs, sources stated. He acknowledged that the excessive tariffs will have a adverse long-term effect on commerce.

There have been a number of questions on India’s marine exports from each side of the aisle, together with from the PAC Chairperson, Mr. Venugopal. Several members identified that a lot of India’s coastal cities could be immediately impacted if shrimp exports declined drastically.

The U.S. has imposed excessive tariffs, notably a 50% obligation carried out in August 2025, which considerably influence India’s marine exports, particularly of shrimp, with shrimp exports dealing with an efficient levy exceeding 58% when mixed with present duties. Mr. Agarwal, sources stated, conceded that the excessive tariff barrier had positioned India at a drawback compared with its rivals.

Mr. Agarwal, sources stated, knowledgeable the panel that India was actively working on opening up new markets by way of Free Trade Agreements with different areas, together with the European Free Trade Association (EFTA) bloc (comprising Iceland, Liechtenstein, Norway, and Switzerland), and the U.Okay., which might “eliminate existing duties”.

EU negotiators have been just lately in India to focus on these agreements, Mr. Agarwal advised the panel, in accordance to sources, and he went on to add that India was focusing on market diversification by efficiently pushing for the registration of extra marine export models within the EU, and interesting in discussions with different international locations, together with Russia.

The committee expressed dissatisfaction over the dearth of clear outcomes from the Export Promotion Capital Goods Scheme, a coverage aimed toward facilitating the import of capital items for producing high quality items and companies to improve India’s manufacturing competitiveness. Under the scheme, duties price ₹42,714 crore have been forgone between monetary years 2018-19 to 2020-21. The panel has directed the federal government to provide you with clear solutions on the way it has helped progress within the manufacturing sector.