India is beginning to experience the effects of the ongoing US-China trade war, with Indian exporters securing orders from US companies and Chinese firms. As trade between the US and China becomes increasingly disrupted due to tariffs, India is stepping in to meet some of the demand, particularly in sectors such as home textiles and engineering goods.
With the US imposing tariffs of up to 145% on Chinese goods, American companies are turning to Indian suppliers to fulfill orders that would traditionally be sourced from China. Indian exporters are now receiving inquiries for products they have not traditionally been strong in, such as pet clothing, while US buyers are seeking alternatives to Chinese goods.
Trade sources report that some US companies with established sourcing bases in China have approached Indian exporters to meet their needs. Indian authorities have supported this shift by organizing virtual meetings to facilitate these transactions. As a result, certain Indian industries are seeing a notable increase in inquiries, with some US buyers looking to source up to $1 billion worth of goods annually from India.
Ajay Sahai, Director General of the Federation of Indian Export Organizations, noted that sectors such as home textiles and engineering goods have seen increased demand. However, challenges remain, especially concerning India’s capacity to handle the surge in orders. The Indian government is working with US companies to address concerns about fulfilling the increased demand, and some buyers have even expressed intentions to visit India in person.
In addition to securing orders from US buyers, Indian exporters are also working with Chinese firms. At the ongoing Canton Fair in China, a major trade event, some Indian visitors were approached by Chinese firms to help fulfill orders from their US customers. Chinese suppliers, who are facing steep tariffs in the US, are looking to Indian companies as an alternative route to maintain business relations with US clients.
While the shift offers new opportunities for Indian exporters, some challenges persist. Indian industry experts, such as Pankaj Chadha from the Engineering Export Promotion Council, caution that India may not have the necessary capacity to meet the surge in demand. Furthermore, Indian regulations on processing Chinese goods before exporting them to the US may limit the extent of this trade shift.
The 90-day window of tariff suspension announced by US President Donald Trump has given Indian exporters a brief opportunity to fulfill urgent orders from US companies. However, trade experts predict that competition for future contracts will intensify, particularly as China seeks to regain access to the US market.
For now, Indian exporters are focusing on fulfilling existing orders, while also looking to expand their capacity where possible. The ongoing US-China trade disruption has introduced both opportunities and challenges for Indian businesses, which will continue to adapt to the changing trade landscape.
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