The escalating trade tensions between the United States and China are expected to create significant opportunities for Indian exporters, as American buyers look to diversify sourcing away from Beijing, according to industry experts.
Federation of Indian Export Organisations (FIEO) president S C Ralhan said the US decision to impose higher tariffs on Chinese goods could redirect trade flows in India’s favour. “We may gain from this escalation,” Ralhan said, noting that India exported goods worth Rs 86 billion to the US in 2024–25.
The US announced an additional 100 per cent tariff on Chinese imports starting 1 November 2025, effectively raising total duties to about 130 per cent. The move came after China’s October 9 decision to expand export controls on rare earth elements—crucial inputs for US defence, electric vehicles, and renewable energy industries.
Currently, American tariffs on Indian goods stand at 50 per cent, compared with 30 per cent on Chinese products. The new tariff hike on Chinese imports will therefore make Indian goods more competitive in the American market. “This will give us an upper edge,” said a leading textile exporter, adding that the new US policy presents “huge export opportunities” for Indian manufacturers in sectors ranging from apparel to electronics.
Think tank GTRI noted that the trade war could have far-reaching global effects, particularly on the pricing of electric vehicles, wind turbines, and semiconductor components. “America depends heavily on China for electronics, textiles, footwear, white goods, and solar panels,” it said, suggesting that sustained tariffs will disrupt global value chains.
The United States remained India’s largest trading partner for the fourth consecutive year in 2024–25, with bilateral trade valued at Rs 131.84 billion, including Rs 86.5 billion in exports. The US accounted for around 18 per cent of India’s total goods exports and over 10 per cent of its overall merchandise trade.
As both nations work towards a bilateral trade agreement, the ongoing US–China tariff war could accelerate India’s role as a trusted manufacturing and export hub, particularly in strategic sectors such as electronics, textiles, and renewable energy. |
