Govt urges industry to shift sourcing from China to US amid tariff concerns: Report

The move follows US President Donald Trump's recent criticism of India’s high tariffs in the automobile and agricultural sectors.

Amid rising concerns over potential export disruptions due to US reciprocal tariffs set to take effect on April 2, the Ministry of Commerce and Industry has asked Indian businesses to identify areas where imports from China and other countries can be substituted with American goods, according to executives cited by The Indian Express.

The move follows US President Donald Trump's recent criticism of India’s high tariffs in the automobile and agricultural sectors. To mitigate the impact of sweeping US tariffs that are reshaping global trade, the Indian government is working on tariff reductions and improved market access, particularly to safeguard exporters' interests.

Commerce Minister Piyush Goyal emphasized the need for exporters to adopt a bold approach and move beyond a "protectionist mindset." According to a statement from the Ministry, Goyal assured that the government is pursuing multiple strategies to ensure the best outcomes for Indian exporters.

In a meeting with industry representatives on Thursday, officials discussed both the challenges and potential opportunities arising from these tariffs, The Indian Express reported. Steel and aluminium exporters informed the government that Trump's 25 percent tariffs on these metals, which came into effect this week, have already impacted $5 billion worth of Indian goods.

During the meeting, industry leaders suggested possible market access adjustments. The textile sector expressed readiness to allow zero-duty access for US products, while the gems and jewellery sector proposed reducing the duty on cut and polished diamonds from the current 5 percent to a minimum of 2.5 percent, according to The Indian Express.

Despite concerns, some exporters highlighted that India is gaining higher orders as major US suppliers like China, Mexico, and Canada face steeper tariffs.

“Apart from agriculture and a few other sectors, these tariffs could work in India’s favour, as we produce goods at much lower costs than the US. Even if tariffs are reduced for the US in certain segments, competitiveness is what matters,” a participant at the meeting told The Indian Express.

Meanwhile, the World Trade Organization (WTO) has warned that rising trade policy uncertainty and potential new tariffs could weigh on global trade in the medium term.