Indian Exporters Poised to Benefit from US-China Trade War? Experts Answers

The ongoing trade war between the US and China is expected to offer a significant boost to Indian exporters, as they look to increase their shipments to the American market, sources revealed.

India emerged as the fourth-largest gainer when the US imposed higher tariffs on Chinese goods during former President Donald Trump ’s first term. With Trump’s return to power, he signed an executive order on Saturday to impose more stringent tariffs on Chinese imports, fulfilling a campaign promise. However, this move is expected to raise prices for American consumers while providing new opportunities for exporters from other countries, including India.

"India is likely to gain out of this trade war. A significant rise in exports is expected from India," said a source familiar with the matter.

Bullish Exporters

Indian exporters are optimistic about the new opportunities arising from the tariffs on Chinese goods, as they would make Chinese products less competitive in the US market. The increase in US duties on Chinese imports could encourage American buyers to seek alternative suppliers to avoid higher costs, creating an opening for Indian products.

Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai noted, "The move can create opportunities for Indian exports due to the trade diversion effects as US buyers will seek alternative suppliers to avoid higher costs."
Sahai also pointed out that the extent of India's gains would depend on its production capacity and competitiveness in the global market. Key sectors likely to benefit include electrical machinery and components, auto components, mobile phones, pharmaceuticals, chemicals, apparel, and fabrics.

According to official data, during April-November 2024-25, the US was India's second-largest trading partner, with bilateral trade in goods valued at USD 82.52 billion. This included USD 52.89 billion worth of exports from India and USD 29.63 billion in imports, resulting in a trade surplus of USD 23.26 billion. The US had been India's largest trading partner between 2021 and 2024.

With the ongoing trade war, Indian exporters are hopeful that the growing trade tensions between the US and China will further boost India's export opportunities to the American market in the coming months.