Image used for representational purposes.
| Photo Credit: Reuters

I don’t support (imposing) tariffs on India. I think that would be really bad. It would lead to a trade war. And I don’t think it’s good for either country,” Mr. Subramanyam said.
| Photo Credit: AP

U.S. Congressman-elect Suhas Subramanyam has said he is opposed to imposing tariffs on India as it will lead to a trade war between the two countries.  

Mr. Subramanyam’s comments came amid the likelihood of higher tariffs on Indian exports by the new Trump administration.

“I don’t support (imposing) tariffs on India. I think that would be really bad. It would lead to a trade war. And I don’t think it’s good for either country,” Mr. Subramanyam told in an interview. Ahead of his election as U.S. President, Donald Trump had taken a potshot at India’s tariff structure and talked about imposing reciprocal tax on countries like China and India.  

Also Read | U.S. Elections 2024 results: Suhas Subramanyam wins Congressional race from Virginia

With Mr. Trump set to assume charge as U.S. president, there is a likelihood of higher tariffs on Indian exports.

“There’s a lot of businesses that do really great work in India and a lot of Indian companies are expanding to the U.S. So the more our countries work together economically, the stronger we’ll be,” Mr. Subramanyam said.

Getting ready to be sworn in as a member of the House of Representatives, which plays a key role in shaping the foreign policy of the United States, Mr. Subramanyam said he wants to be someone who promotes democracy around the world.

“India, for instance, is one of the largest democracies, and the U.S.-India relationship is very important to both countries,” he said.

Mr. Subramanyam, 38, is the sixth Indian-American elected to the U.S. House of Representatives.

He joins Indian Americans Dr. Ami Bera, Pramila Jayapal, Raja Krishnamoorthi, Ro Khanna and Shri Thanedar in the so-called Samosa Caucus.

He was declared elected from the 10th Congressional District of Virginia and is the first Indian-American to be elected from the East Coast.

He also advocated an overhaul of the U.S. immigration system.

“I’m hearing a lot about immigration, especially people on H-1B visas trying to get a path to citizenship and a Green Card at least. And at least a change of status,” Mr. Subramanyam said.

“We need an immigration system overhaul in the United States. We need to focus on legal immigration. There’s a lot of talk about undocumented immigrants, and I certainly support securing our border, but we need to do more than just that,” he said.

Mr. Subramanyam said he would also oppose any move by the incoming Trump administration to cut large-scale federal jobs and is looking to be a champion of the federal workforce.

.”I want to make sure as they look at the government overhaul that’s being proposed, that doesn’t mean firing federal workers or cancelling federal contracts,” he said.

He said he looks forward to being a champion for the federal workforce in Virginia. “I will oppose any efforts (of the incoming administration to cut federal jobs),” he said.

Representational image of rice grains being winnowed at a paddy field in Kerala. India has revoked the export duty on parboiled rice
| Photo Credit: K.K. Mustafah

The Union Government has scrapped the export tax on parboiled rice, it said in an official order on Tuesday (October 22, 2024), as inventories across India — the world’s biggest exporter of the grain — surged and the country is set to produce a bumper crop after copious monsoon rains.

The decision to remove the tax follows last month’s move to reduce the duty to 10% from 20% to boost exports.

Last month, the government also gave the go-ahead for exports of non-basmati white rice to resume. But New Delhi set a floor price for non-basmati white rice exports at $490 a metric ton.

Bigger rice shipments from India would beef up overall global supplies and soften international prices by forcing other major exporters — such as Pakistan, Thailand and Vietnam — to reduce their rates, trade and industry officials said.

Confidence in new season crop

The decision to remove the export tax on parboiled rice signals the government’s confidence about the new season crop, said Dev Garg, vice-president of the Indian Rice Exporters Association.

Duty-free exports of parboiled rice would encourage price-sensitive African buyers to step up purchases from India, said B.V. Krishna Rao, president of the Rice Exporters’ Association.

India also scrapped the 10% export duty on husked brown rice and rice paddy, the order said.

Exporters are worried that high freight cost could impact exports. Representational
| Photo Credit: PTI

There is no adverse impact on India’s exports and imports so far due to the Red Sea crisis, an official said. The official said that the transportation cost has increased as the shippers are taking a long route.

“There is no impact in volume terms so far. Only the transportation cost is up. It has risen for all the countries. It has not affected the trade adversely so far. We have to see the long term demand, but it will depend on the EU and the US,” the official added.

These two regions account for over 30% of India’s total exports.

However, exporters said that they are keeping their fingers crossed as due to the significant jump in freight cost, India’s exports may be impacted. The trade data for January will be released by the Commerce Ministry on February 15. In December last year, exports rose marginally by one per cent to $38.45 billion.

Due to the attacks by Yemen-based Houthi rebels on commercial ships, the movement of goods from the Red Sea, the world’s busiest shipping route, has disrupted the global supply chains as vessels have to take long routes for exports and imports.

The immediate ripple effects are seen in increased freight costs, mandatory war risk insurance, and significant delays due to rerouting.

Costs jump due to conflict

According to think tank GTRI, the average container spot rates have more than doubled since early December 2023. Basmati rice exporters face freight costs soaring to $2,000 per 20-tonne container for destinations around the Red Sea, marking a 233% increase, it has said in a report.

Houthi group has been using drones and rockets to target ships, which are transporting goods through the strait of Bab al-Mandab, which is a crucial shipping route connecting the Mediterranean Sea to the Indian Ocean.

The strait, vital for 30% of the global container traffic, has seen increased tensions with various incidents in 2023, including attacks and military manoeuvres by regional and global powers.

India is heavily reliant on this route for trade and energy imports and due to the disruptions, exporters here have to diversify their trade routes.

Strikes have been continuing for many years but escalated this year sharply, with militants now using anti-ship ballistic missiles.

To avoid attacks, most large shipping firms, since December 15 last year, have stopped using the Bab al-Mandab straits for trade with Europe via the Red Sea and Suez Canal. The closure of this route snaps a critical trade link between Europe and India and all of Asia.

Ships going to Europe will now move via a much longer route around the Cape of Good Hope, the bottom tip of Africa. This change increases voyage distances by 40% and raises transportation time and cost.

Change in shipping routes

The two main shipping routes from India to Europe are via Bab-el-Mandeb Strait, Suez Canal and Red Sea; and via Cape of Good Hope, encircling Africa.

The Red Sea route is shorter and faster, making it the preferred option for most shipping companies. It starts from major Indian ports like Mumbai, JNPT, or Chennai, heads westward through the Arabian Sea, enters the Red Sea, and navigates through the Suez Canal into the Mediterranean Sea. From there, ships can reach various European ports depending on their destinations.

India is heavily reliant on this strait for its crude oil, LNG imports and trade with West Asia, Africa, and Europe.

The Cape of Good Hope route is longer and slower than the Suez Canal route, but it avoids the potential for delays or disruptions. It is used for bulk cargo shipments where time is less critical or when political instability in West Asia raises concerns about using the Suez Canal.

It starts from the Indian ports, heads southward across the Indian Ocean, rounds the Cape of Good Hope at the southern tip of Africa, and then sails northward along the west coast of Africa before entering the Mediterranean Sea and reaching European ports.