US-China Trade War: Indian Exporters Set to Gain

US-China Trade War: Indian Exporters Set to Gain

The ongoing trade war between the US and China is poised to create significant opportunities for Indian exporters. Experts believe that the recent increase in tariffs imposed by the US on Chinese goods will lead to a rise in shipments from India to the American market.

S C Ralhan, President of the Federation of Indian Export Organisations, stated that the US's decision to implement a 100 per cent tariff on Chinese imports, effective November 1, 2025, will shift demand towards Indian products. In the fiscal year 2024-25, India exported goods worth USD 86 billion to the US. Ralhan remarked, "We may gain from this escalation."

The new tariffs will raise the overall tariff rate on Chinese imports to approximately 130 per cent. This move follows China's recent restrictions on rare earth exports, which are crucial for various US industries, including defense and clean energy. Currently, US tariffs on Indian goods stand at 50 per cent, compared to 30 per cent on Chinese products.

A textile exporter noted that the increased tariffs on Chinese goods will provide India with a competitive advantage. Another exporter highlighted that the higher customs duties will create substantial export opportunities for Indian products in the US market.

Toy exporter Manu Gupta expressed optimism, stating, "High duty will create a parity and will give us a level playing field." He mentioned that American retailers, including Target, have shown interest in sourcing new products from India.

According to the think tank GTRI, the escalating trade tensions will also impact global prices for electric vehicles, wind turbines, and semiconductor components. The US heavily relies on China for various goods, including electronics and textiles.

In 2024-25, the US remained India's largest trading partner, with bilateral trade reaching USD 131.84 billion, of which USD 86.5 billion were exports from India. The US accounts for about 18 per cent of India's total goods exports and 6.22 per cent of its imports. Currently, India and the US are in discussions to establish a bilateral trade agreement, which could further enhance trade relations between the two nations.