India’s traders did not waste time and as President Trump imposed a 25% fee on Indian exports and then doubled it on buying oil from Russia, he immediately started looking for alternatives in the UAE. These fees have come into force since today (27 August).
Consultancy companies offering business setup and support service say that the inquiry from Indian companies has increased considerably since Trump’s announcement. The CEO of a UAE -based Food Processing Unit said, “When the first 25% fee was imposed, many people in India felt that it is just a trump bargaining move. But when the second 25% was also added and no compromise was seen, Indian companies started talking on the possibilities of investing in joint venture or UAE with us.”
The same trend is also seen in the UAE’s jewelery industry. Many Indian jewelery companies are now considering opening design and production centers here, rather they export directly from India. If the 50% fee remains intact, Indian jewelery companies will not survive in the US market.
Labor-based Indian exports, which have long been dependent on the US, are now in great difficulty. It is not just tariff, but has been said to be expelled from the house settled for decades. However, this fee is not applicable to medicines and technology related things. This means that there will be no additional fee on the iPhone sent from India to America.
On Monday (August 26), the rupee weakened due to the impact of these fees and the Sensex fell by more than 1%. At the same time, the Indian stock markets are closed today due to Ganesh Chaturthi.
If Indian jewelers shift to the UAE for American exports, they will have to pay only 10% fee, not 50%. But this benefit will be available only when the actual production and value edition are done in the UAE itself.
