India is targeting at least 10 key sectors where high US tariffs on Chinese goods give it a competitive edge in the American market, according to officials speaking with Economic Times. These sectors include apparel, chemicals, plastics, rubber, vehicles (excluding railways), mineral fuels, and pharmaceuticals, among others.
The strategy aims to leverage the tariff advantage in these industries to offset losses in other categories affected by high US tariffs. While India faces a 10 percent baseline tariff following the temporary suspension of 26 percent reciprocal duties for 90 days, China is still burdened with a much higher 145 percent tariff rate, making Indian exports more competitive in certain markets.
India's push comes at a time when other competitors, such as Vietnam, Bangladesh, and Cambodia, are offering duty concessions to the US, making it vital for India to capitalize on its advantage in specific sectors.
“Our internal assessment shows that of the 30 top imports into the US, India has a competitive advantage on one-third, or roughly 10 products, and a higher scope to capture more US market share,” an official told Economic Times.
Niti Aayog’s analysis reveals a significant opportunity in the apparel market, where China’s share of US apparel imports stands at 25 percent, while India holds just 3.8 percent. This tariff differential opens up a major chance for India to increase its presence in the US market.
In electronics, where the US imports $900 billion worth of goods annually, China holds over 50% of the market share, while India’s share remains at only 7 percent. This gap further underscores the potential for India to increase its exports in the sector, especially as US buyers shift sourcing away from China.
“We are also exploring additional export opportunities arising from the US-China tariff war,” another official said.
Other promising areas for India include gems and jewelry, as well as iron and steel products.
The push to maximize export opportunities is part of India’s broader goal of doubling its trade with the US to $500 billion by 2030. However, the window to capitalize on these advantages is limited. The 26 percent tariff rate is expected to return on July 9, although both countries hope to finalize an early harvest trade deal by then, which will serve as a precursor to a more comprehensive bilateral trade agreement.
Industry insiders note that the ongoing shifts in global trade patterns are already benefiting India. An apparel exporter mentioned that US buyers, who once sourced 30-40 percent of their products from China, are now looking to diversify their suppliers, providing India with an opportunity to fill that gap. The US imports around $120 billion in textiles and apparel annually, further boosting India’s export potential in the sector.
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