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Can US tariffs on China help India? Experts weigh in
India was among the top four countries to gain when the United States hiked tariffs on Chinese goods during Donald Trump’s first term.
With the US imposing high tariffs on imports from China, Mexico, and Canada, Indian exporters are expected to gain new opportunities, particularly in sectors like agriculture, engineering, machine tools, garments, textiles, chemicals, and leather, experts say.
India was among the top four countries to gain when the United States hiked tariffs on Chinese goods during Donald Trump’s first term.
Now, with the Trump administration raising duties to 25 percent on imports from Mexico and Canada starting Tuesday and doubling tariffs on all Chinese imports to 20 percent, Indian exporters could see new opportunities.
“This can help Indian exporters in sectors such as agriculture, engineering, machine tools, garments, textiles, chemicals, and leather,” President-designate of Federation of Indian Export Organisations (FIEO) SC Ralhan said.
The tariffs are set to impact exports from China, Mexico, and Canada to the US by driving up their prices in the American market, reducing their competitiveness.
“Indian exporters would have to tap into these opportunities,” said Ralhan
Economic think tank GTRI also said that the escalating trade war could boost India’s exports and attract investments from American companies.
It added that higher tariffs on Chinese goods create an opportunity for India to strengthen its manufacturing sector.
GTRI founder Ajay Srivastava recalled that Trump, unhappy with NAFTA's terms, replaced it with the USMCA (US-Mexico-Canada FTA) in 2018-19, arguing that the older pact was outdated and harmed American workers.
“Now, he is again unhappy with his own deal and has imposed 25 percent tariffs on Canada and Mexico starting today, violating USMCA's terms. This highlights his disregard for negotiated trade agreements. To avoid a similar situation, India should be cautious about negotiating a comprehensive FTA with the US,” he said.
“Worse, at the negotiating table, the US may demand India not just tariff cuts but also additional concessions, such as opening government procurement, reducing agricultural subsidies, weakening patent protections, and allowing unrestricted data flows, demands India has resisted for decades,” Srivastava said.
Instead of an FTA, Srivastava said India may offer a “Zero-for-Zero Tariff” deal to the USA by proposing to eliminate tariffs on most industrial products from the US, provided the US does the same for Indian goods.
