125% tariff on China may boost exports of Indian small firm products: GTRI

The US enforcement action, which has set 125 percent import tariffs on China, has unexpectedly provided a unique chance for small manufacturers in India, granting them a temporary export opportunity, stated the Global Trade Research Initiative (GTRI) on Wednesday.

GTRI noted in its recent analysis that the US action might create new opportunities for Indian producers to boost exports to the US, leveraging the changes in trade dynamics brought about by the tariffs.

"A steep 125 percent U.S. import tariff on Chinese goods has opened a rare, short-term export window for India's small manufacturers," the GTRI said.

In 2024, the United States brought in more than USD 148 billion in these goods, with China providing USD 105.9 billion—almost 72 percent of the overall amount. India's portion was only USD 4.3 billion, which amounts to 2.9 percent. The report emphasized that because of China's 125 percent import tariffs, a significant opportunity has emerged in the US markets that small Indian manufacturers could fill.

"Indian producers already make many of these goods--from locks to lamps to plasticware--but mostly at a small scale. With the right government push on export incentives, product certifications, and financing, these firms could expand quickly and tap into this USD 100 billion opening, "the GTRI said, adding, "But the window is narrow--and may not stay open for long."

The report lists the items that small Indian manufacturers can supply to the US.

The GTRI stated that India's small-scale industrial sector must enhance its depth, size, and capabilities to capitalize on this opportunity. It mentioned that it should be supported by the proper combination of incentives and strategic backing.

The report suggested improving RoDTEP (Remission of Duties and Taxes on Exported Products) and duty drawback rates for specified products.

Additionally, the GTRI proposed the establishment of a dedicated online support team to assist Micro, Small and Medium Enterprises (MSMEs) with the regulatory processes and certifications required to access the US market