Israeli Envoy Reuven Azar Calls Trump Tariffs on India 'Temporary Issue', Commerce Ministry Official Echoes Similar Sentiment

New Delhi: Israel's Ambassador to India, Reuven Azar, on Thursday called the US tariffs on India a "temporary issue" that can be addressed through dialogue between the two nations.

He further stated that the relations between India and Israel will not be impacted by this.

"I don't think it has any effect [on India-Israel relations]. I'm not an expert on the Indian market. I know that when it comes to the trade between India and Israel, it's not going to be undermined. Well, I hope this is a temporary issue that will be solved because I think that countries have a common interest to continue cooperating," he told ANI.

‘It Will Not Be a Very Long-term Loss’: Commerce Ministry Official

Echoing similar sentiments, a Commerce Ministry official told ANI that the recent imposition of 50 per cent tariffs by the United States will have a short-term impact on India's exports, particularly in sectors such as textiles, chemicals, and machinery. However, the official asserted that the long-term effect on overall trade and GDP will remain limited.

"It is an understood thing that 50% tariffs are going to impact trade. There will be an impact on the textile, chemicals and machinery sectors in the short run, but it will not be a very long-term loss," the official said.

"The industry is worried; they have been sending representations. The industry has pointed out that in the short run, their orders will face slow down, they will face a liquidity crunch. They will be under financial strain to run their operation. They have been writing to the government to help them meet this liquidity crunch in the short run. Positive work is underway to determine the best way to implement their suggestions. Their suggestions are on the govt's agenda," the official added.

The official also said that the rollout of the Export Promotion Mission (EPM) is underway to provide support to the industry.

"We are trying to expedite the rollout of the Export Promotion Mission (EPM) as soon as possible, so that it will give some impetus and support to the industry. We need to create resilient supply chains, whether these are export supply chains or import supply chains. Every challenge or crisis, is a new opportunity. So it's a wake up call for industry, for governments, everybody, to see how we can diversify our exports," the official said.

Ministry of Finance's Take On Trump Tariffs

The immediate impact of the recently imposed US tariffs on Indian exports may appear limited, but a report by the Department of Economic Affairs under the Ministry of Finance highlighted that the secondary and tertiary effects on the economy pose significant challenges that must be addressed.

According to the report, while the initial impact on exports is contained, broader effects could emerge in areas such as supply chains, inflationary trends, and the competitiveness of Indian goods in global markets.

The report stated, "While the immediate impact of recent US tariffs on Indian exports may appear limited, their secondary and tertiary effects on the economy pose challenges".

To navigate the challenging global trade environment, the Prime Minister has announced a set of policy initiatives aimed at boosting growth and strengthening the economy.

A key step is the creation of a Task Force for Next-Generation Reforms, which will focus on simplifying regulations, lowering compliance costs, and fostering a more enabling environment for startups, MSMEs, and entrepreneurs.

Additionally, the government is preparing to roll out the Next-Generation GST Reforms in the coming months. These reforms will aim to reduce the tax burden on essential items, a move expected to provide direct relief to households and boost consumption demand.

The report also noted that a recent rating upgrade is expected to provide further momentum by lowering borrowing costs, attracting greater foreign capital inflows, expanding access to global capital markets, and easing inflationary pressures.

This, in turn, will reduce input costs for businesses and support overall economic growth.

(With inputs from ANI)

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