THE ongoing trade war between the United States and China is expected to create significant opportunities for Indian exporters. As tensions rise between the two economic giants, India is poised to benefit from the disruption of trade flows.
Sources indicate that India stands to gain, especially in terms of increasing exports to the American market, a trend that began during former US President Donald Trump’s first term in office.
When the US imposed higher tariffs on Chinese goods, India emerged as one of the largest beneficiaries, ranking fourth in the list of countries whose exports surged in response.
With the continuation of this trade war, India is expected to experience a further boost in shipments to the US. This shift has resulted in India being seen as a viable alternative for many American buyers who are looking to avoid the higher costs associated with Chinese imports.
On Saturday, Trump signed an order to impose stiff tariffs on Chinese imports, a move that aligns with his ongoing campaign to push for more protectionist trade policies.
Although this measure may lead to higher prices for US consumers, it has provided a significant opportunity for India. As US buyers search for cheaper alternatives to Chinese goods, India’s exporters are likely to benefit from the trade diversion effect.
The Federation of Indian Export Organisations (FIEO) Director General, Ajay Sahai, pointed out that the increased customs duties on Chinese goods have opened up avenues for Indian goods to replace Chinese products in the American market.
While the extent of these benefits will depend on India’s production capacity and competitiveness, there are several sectors poised to take advantage of this situation.
Key industries that are expected to benefit include electrical machinery and components, auto components, pharmaceuticals, chemicals, mobile phones, apparel, and fabrics.
India’s trade with the US has been strong, with the US emerging as one of India’s most significant trading partners. Between April and November 2024-25, India’s bilateral trade with the US amounted to USD 82.52 billion.
This included USD 52.89 billion worth of exports from India to the US, a trade surplus of USD 23.26 billion, and USD 29.63 billion worth of imports. In fact, during 2021-2024, the US was India’s largest trading partner.
The trade war between the US and China has caused substantial disruptions in global trade patterns, but India is strategically positioned to capitalise on these shifts.
With the US seeking to reduce its dependence on China, Indian exporters are now in a prime position to meet the rising demand for goods across various sectors.
However, to fully harness this opportunity, Indian exporters will need to improve their competitiveness. This includes increasing production capabilities and ensuring that their goods are of the required quality at competitive prices.
India’s ability to step in and fill the void left by China in the US market will depend on how well it can enhance its manufacturing capacities and streamline its export processes.
