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The tariffs that US President Donald Trump imposed on Chinese goods present a significant opportunity for India, if it undertakes internal reforms to capture a share of what China loses in exports.
In 2024, China exported goods worth USD 462 billion to the US, while India's exports stood at USD 90 billion. Former Additional Director General of Foreign Trade (DGFT) Ajay Srivastava noted that between 2017 and 2024, India's exports to the US rose by USD 38 billion, much of it at China's expense. In an exclusive conversation with ANI, Srivastava said "During the last tariff war, if we compare rise in India's exports to USA between 2017 and 2024, our exports to USA rose by 38 billion dollars. And much of it is what China has lost. So there is a scope. But for that we have to do internal reforms". He emphasized that further gains would require internal reforms, cost-effective manufacturing, and deep manufacturing capabilities. One sector where India could benefit is auto parts. In 2024, India exported USD 2.2 billion worth of auto parts to the US, while China's exports stood at USD 10 billion. Mexico, however, dominated the sector with USD 90 billion in exports. If both China and Mexico face tariffs, Indian manufacturers could secure a larger share of the U.S. market. He said "Our exports to USA of auto parts for 2.2 billion dollars in 2024. China exports were 10 billion dollars, but most export of about 90 billion dollars to the USA were going from Mexico. So if both China and Mexico they are suffering because of US tariffs, we don't know whether we are going to survive. We could survive tariffs. Then of course a fair chunk of auto part exports will come to India". However, Srivastava cautioned that the impact would depend on how Trump structures his tariffs. If he applies sector-wide tariffs, including both auto parts and passenger vehicles, India's exposure could increase. While India's tariffs on auto parts are 7.5 per cent compared to the U.S. rate of 2 percent--a difference of about five per cent--grouping auto parts with passenger vehicles could lead to broader repercussions. On passenger cars, India's exports to the US were less than USD 2 million in 2024, meaning any tariffs on this segment would have little effect. However, if Trump imposes a flat tariff across the entire auto sector, it could impact India's potential gains in auto parts exports. While full details are yet to emerge, Srivastava emphasized that India must continue strengthening its manufacturing sector to remain competitive in global trade. (ANI)
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