India US Market: India seizes the moment with targeting 10 key sectors including apparel, chemicals, plastic, rubber, vehicles, minerals fuels, and pharmaceuticals etc. these Chinese goods facing high tariffs by US according to the ET officials.
India is strategically positioning itself to capture a larger share of U.S. import markets by capitalizing on the widening tariff gap between India and China. This aims to realign its trade strategy in light of evolving geopolitical and trade tensions. Particularly with China and US.
The Tariff Gap between 10% to 145%
India currently face baseline U.S. tariff of 10% on exports which has been temporarily reduced due to 90-day suspension of India’s own 26% reciprocal duties on certain American goods. On the other hand, Chinese goods entering the U.S. are subject to a much higher tariff rate of 145%, these problems risen under the Trump’s administration of “too much tariff” while China-US trade war conflicts continue eventually effected on India.
But this difference will give Indian exporters a significant competitive edge in price-sensitive sectors where Chinese goods have traditionally dominated. The strategic moment for India to take opportunity of reduced duties however it is a golden window for Indian manufacturers and exporters to gain traction in the US markets.
Main Key Sectors Where India Seeks Gains in India US Market
India is especially focusing on key sectors where it has a cost or capability advantage, and where China’s loss can be its gain.
Textiles and Apparel
The U.S. retail market has traditionally been dominated by China and India. Tariff differences make Indian Textiles and Apparel more affordable, and thus Indian products are more attractive to US consumers.
Engineering Goods and Auto Components
The rising interest in these mid-tech sectors from US importers. These importers want to move their supply chains away from China.
Chemicals and Pharmaceuticals
India’s pharma industry already has strong U.S. exposure but Chemical tariffs created an opening because of the tariff gap now India can export more raw materials too.
Consumer Electronics
Though China still dominates, India is pushing “Make in India” initiatives to attract US buyers amid rising China costs. And India is persuing a scope of India US Market on large scale.
India has Offsetting Losses Elsewhere
This strategy isn’t just about expansion but also mitigation. Indian exports in some categories have suffered from high U.S. tariffs, global demand slowdowns, and shifting supply chains. This moment is seen as an opportunity to offsetting these losses by taking advantage in high opportunity sectors, aims to offset the trade balance which impact by the higher tariff.
U.S. China decoupling and friend-shoring
A concept where the U.S. seeks to deepen trade ties with geopolitical allies like India. It is a sharp signal for India to filling the gap where China has been moved from big sectors, India US Market is ready to fill the vacuum.
US apparel import from China has 25% share where India has only 3% it is a good time for India to make a good share in the US apparel imports it will strengthen India US Market.
image via iStock
From the top 30 sectors India can have 10 products in the US long-list of imports India has a competitive advantage on one third, a higher scope to capture US market share.
Read also: Trade War Impact on India
In electronics, $900 billion of US import of goods annually, where China holds over 50% in market share and India has only 7% yet, now has the potential to fill the gap while US buyers moving away from Chinese goods.
Official said in moneycontrol, “we are exploring more additional export opportunities arising from the US-China tariff war.”
Why India has to strengthen in US market share?
India has other competitors such as Vietnam, Bangladesh and Cambodia. they are offering US duty concessions. Because of this, India must use its strengths in key industries. It is a crucial time to act.
