U.S.-China Tariff Tensions Could Open Doors for India: Export Leaders Eye Relocation, Investment, and Tech Leadership
US-China Trade Conflict: A Strategic Opportunity for India
India’s export and economic policymakers are watching closely as tensions escalate between the United States and China. With Washington imposing a steep 125% tariff on Chinese imports in multiple sectors, including manufacturing and consumer goods, Indian exporters see an unprecedented window of opportunity.
Ajai Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO), highlighted that such high tariffs could force Chinese firms to vacate critical market sectors in the U.S., paving the way for Indian businesses to fill the void—particularly in sectors like textiles and footwear, where China previously held over 25% of the U.S. market share.
Indian Manufacturing Gears Up for Relocation Boom
According to Sahai, multinational firms that once relied on China as their primary manufacturing base for U.S.-bound exports are likely to look toward India as a viable alternative. With a large domestic market, growing infrastructure, and improving ease of doing business, India is increasingly being seen as an integrated part of global value chains.
This strategic repositioning is further bolstered by the Indian government’s Production Linked Incentive (PLI) schemes, especially in sectors like electronics, which have propelled smartphone exports—including iPhones—from India. However, Sahai cautioned that value addition in the domestic manufacturing ecosystem remains an area for improvement.
.jpg)
90-Day Window: A Relief for Exporters
In a move that brought immediate relief to exporters, the U.S. announced a 90-day negotiation window for bilateral trade agreements, preventing a sudden disruption in trade. Exporters had earlier halted or delayed orders beyond April 9, anticipating harsh penalties. Sahai confirmed that India was among the first to initiate such talks with the U.S., giving it a “first-mover advantage.”
Engineering Sector Looks for Global Diversification
Pankaj Chaddha, Chairman of the Engineering Export Promotion Council (EEPC), shared that the U.S. is currently India’s largest export market for engineering goods, valued at nearly $20 billion between April and February of FY 2024-25. However, the recent trade shock could cause a temporary annual drop of $4–5 billion in this sector.
To counterbalance this potential dip, Chaddha emphasized the urgent need for India to fast-track trade negotiations with the EU, UK, Canada, and GCC nations.
Experts Say India Can Match China’s Capabilities
Rishi Shah, Partner and Senior Economist at Grant Thornton Bharat, called the 90-day relief a breather for global economies—except China. He noted that India remains the only country with the scale, manpower, and resources to challenge China's dominance in global manufacturing and exports.
Shah also warned of possible dumping of Chinese goods in India, as China tries to manage its excess output. FIEO confirmed that India has sufficient legal tools—such as anti-dumping duties, safeguard measures, and minimum import pricing—to respond to such challenges effectively.
Global Technology Summit 2025: India Eyes Tech Diplomacy
As India positions itself for global leadership in trade and investment, it is also taking center stage in technology diplomacy. External Affairs Minister S. Jaishankar will participate in the Carnegie India Global Technology Summit (GTS) 2025, co-hosted by the Ministry of External Affairs and Carnegie India.
Running from April 10 to 12, GTS 2025 will feature over 40 sessions, including keynotes, expert panels, and ministerial dialogues focused on AI governance, cybersecurity, space security, and global digital partnerships. With the theme “Sambhavna” (Possibilities), the event aims to promote innovation and cross-border collaboration, particularly across the Global South.
Prominent attendees include Commerce Minister Piyush Goyal, Foreign Secretary Vikram Misri, and diplomats from the U.S., UK, Germany, Australia, and the EU, reinforcing India's central role in shaping global technology standards.
Conclusion
India finds itself at a crucial inflection point—geopolitically and economically. With global supply chains shifting, and trade tensions between the U.S. and China intensifying, India has a rare chance to emerge as a global manufacturing hub while simultaneously positioning itself as a leader in digital governance and tech diplomacy. Exporters and policymakers alike are optimistic, but strategic execution and timely reforms will be key to converting these possibilities into performance.
Comments
Post a Comment