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BUSINESS & TRADE APRIL 18, 2025 | The Indian Eye 33

TARIFF WAR

Can China’s loss could be India’s gain as US

companies may exit the second biggest economy?

US is the top destination for engineering exporters, with India exporting around USD 20 billion

worth of engineering goods from April to February in 2024-2025

OUR BUREAU

New Delhi
ndian export leaders are optimistic that the
ongoing US-China trade tensions could create
Isignificant opportunities for India in both trade
and foreign investment, according to statements
from key industry figures. Ajai Sahai, Director Gen-
eral and Chief Executive Officer of the Federation
of Indian Export Organizations (FIEO), believes
that with Chinese imports facing 125 per cent duty
in most sectors, “China will have no other option
but to vacate the US market.”
This could create opportunities for India in sec-
tors where China currently holds over 25 per cent
market share, such as textiles and footwear. “US
companies or other companies who were placed in
manufacturing in China to cater to the US market
will be relocating. And they may also be relocating
to India, because India has the advantage of having
a huge market in itself,” Sahai explained.
He added that India is developing an ecosystem
aimed at integrating into global value chains, making India is the only country which can match up to China in terms of availability of resources,
it an attractive alternative manufacturing base. The
recent 90-day window announced by the US for ne- availability of skilled manpower and the workforce (File photo)
gotiating bilateral trade agreements has come as “a
huge relief to the export sector,” according to Sahai. dow as “a breather to practically all the world, bar- Sahai assured that “the government has various
He noted that prior to this announcement, ring the Chinese economy.” instruments at their disposal, maybe anti-subsidy, may-
many orders after April 9 had been put on hold, He noted that trade discussions between India be anti-dumping, maybe safeguard duty, maybe the
with some companies exclusively dealing with the and the US are already at an advanced stage, and this minimum import prices” to address such challenges.
US market facing potential production halts. “Since period provides an opportunity to “come to a closure.” Meanwhile, With US President Donald Trump
we have the 90 days time frame, it will be business as Regarding potential Chinese responses, Shah going all out in his trade war on China by imposing
usual. Exporters will continue to export to the US,” observed that China has established production ca- 125 per cent tariff on import of Chinese goods, Bei-
Sahai said, highlighting that India has the “early pabilities across the world, including in Cambodia, jing has reached out to the European Union (EU)
mover advantage” as the first country to enter into Vietnam, Indonesia, and Mexico, suggesting they and ASEAN countries to forge a united front and
such an arrangement with the US. may have anticipated global economic disruptions. force the US to backtrack.
Pankaj Chaddha, Chairman of the Engineer- Despite this, he views the situation as “a posi- Beijing has retaliated with “countermeasures”
ing Export Promotion Council (EEPC), reported tive” for India, which he believes is “the only coun- imposing an 84 per cent tariff on US goods, which
that the US is the top destination for engineering try which can match up to China in terms of avail- will take effect on Thursday. The 27-nation Euro-
exporters, with India exporting around USD 20 ability of resources, availability of skilled manpower pean Union bloc also hit back at Trump’s tariffs on
billion worth of engineering goods from April to and the workforce.” Wednesday by approving levies of up to 25 per cent.
February in 2024-2025. The smartphone sector was highlighted as a China and the European Union vowed to joint-
However, he cautioned that “engineering particular success story, with Sahai crediting the ly uphold the multilateral trading system with the
goods exports may drop by USD 4 billion to USD Production Linked Incentive (PLI) scheme for WTO at its core, China’s commerce ministry said in a
5 billion annually in the first year,” though he ex- boosting iPhone exports from India. statement released today as per Chinese state media.
pressed confidence that losses could be covered by However, he noted that “the value addition is Chinese Commerce Minister Wang Wentao and
exploring new markets. not up to the desired level” and domestic compo- European Commissioner for Trade and Economic
Chaddha recommended that “India should nent manufacturing needs improvement - an issue Security Maros Sefcovic held discussions via video
accelerate its efforts for trade agreements with the the government is addressing through recently in- on Tuesday and discussed enhancing China-EU
EU, UK, Canada and the GCC” to provide relief troduced schemes for the electronics sector. economic and trade cooperation and responding to
to exporters. Export leaders also expressed concerns about the “reciprocal tariffs” imposed by the US, the Min-
Rishi Shah, Partner and Senior Economist at potential Chinese dumping of goods in the Indian istry of Commerce (MOFCOM) said on Thursday
Grant Thornton Bharat, described the 90-day win- market as they lose US market share. in a statement, Xinhua reported.

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