Indian businesses target billions in US market amid tariff threat to China

Indian exporters are preparing to increase their presence in the US market, anticipating higher tariffs on Chinese goods, ToI reported. They are discussing strategies with the Indian government to capitalize on potential opportunities in sectors like textiles, leather, chemicals, electronics, auto parts, and toys. These discussions involve collaborating with American trade organizations and raising awareness of Indian products in the US.“These are sectors where we have built capacity and where we are competitive. We should be ready to take advantage of the opportunity if it arises,” said Israr Ahmed, vice-president of industry lobby group Fieo. The toy sector alone presents a potential $1 billion US market opportunity in the next few years.

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Ahmed explained that with US President-elect Donald Trump’s push to reduce reliance on China, American businesses are seeking alternative suppliers, positioning India favorably. “India has strong relations with the US, we have political stability and we are a democracy. India is in a good position,” Ahmed added.

To achieve this, exporters are requesting increased financial support for promotion in the US market. Ahmed believes greater visibility is crucial for Indian products. He also suggests stronger partnerships with American businesses and industry bodies.

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Exporters are requesting more funding from the government’s Market Access Initiatives (MAI) scheme to specifically target the US market for the next three years. They are also asking for better access to export finance and the reinstatement of interest equalization schemes to enhance their competitiveness. Additionally, Fieo has asked the government to ease payment requirements for Micro, Small, and Medium Enterprises (MSMEs) and extend the interest equalization scheme by five years.As tensions between the U.S. and China escalate, Beijing is moving to preempt potential trade restrictions under a new U.S. administration, analysts told Reuters. Amid tariff threats from former President Donald Trump, China appears to be strategizing for negotiations to avoid a full-blown trade war.Drawing lessons from previous trade disputes during Trump’s presidency, China is amassing leverage to address key bilateral issues, including trade, investment, and technology. Concerns over the impact of additional tariffs on its already weakened economy are driving these efforts.

Recently, China initiated an antitrust investigation into U.S. chipmaker Nvidia, following its earlier restrictions on exporting rare minerals to the U.S. These moves highlight China’s intent to exert pressure while seeking a stronger negotiating position.

Despite its strengthened global presence in sectors like electric vehicles and green energy, China remains vulnerable. It has reduced reliance on U.S. products like Boeing jets, replacing them with alternatives such as Airbus aircraft and the domestically produced Comac C919. However, the country still depends on global supply chains.

Analysts caution that another trade war with the world’s largest economy could disproportionately harm China, as the U.S. retains the ability to impose higher import tariffs and further disrupt supply chains critical to Chinese industries.

(with ToI inputs)