News / India trade players hold back on production shifts as they eye tariff relief

ID 155056399 © Ruletkka

India-US stakeholders are holding off on major relocations in hope of a tariff reduction, as Indian factories offer incentives for struggling importers.  

One US importer told The Loadstar that while they were “continuing to investigate” manufacturing options for “labour-intensive production outside of India”, they had yet to make any concrete moves.  

“Most expect US tariffs on India – presently at a combined 50% – to drop to 20%-25% by November,” the shipper explained. 

They said the high rates of importing from India were “not sustainable” from the US side and predicted that the inflationary impact “will force Trump’s hand”.  

“If China indeed is the intended ‘enemy of the future’, then it does no good to alienate a natural ally in India as a counterweight. Congress knows that, and if Trump finally starts to lose their support, he will need to throw them a bone. 

“India will also do its part, to buy more US oil and weapons and probably corn, to give Trump face,” they added. 

Further, the shipper revealed, Indian factories have been offering “additional credit terms” to retain business, as they’re aware of increased tariffs “stressing US importer cash flows”. 

In a similar move, The Loadstar previously reported that Chinese shipyards had been offering discounts to encourage new orders and counteract the upcoming USTR fees on Chinese-built tonnage. 

According to the shipper, vessel space from India to the US is currently “plentiful”, due to a tariff-related demand slump, and some carriers are restricting capacity to mitigate losses.  

This, however, is largely proving to be like trying to clean a flood with a paper towel, as rates slipped yet again last week amid extremely low demand.