US 125 pc tariff on China could fuel India’s exports by small firms made products: GTRI

NEW DELHI: The US crackdown, which has imposed 125 per cent import tariffs on China, has unexpectedly created a rare opportunity for India’s small manufacturers, offering them a short-term export window, said the Global Trade Research Initiative (GTRI) on Wednesday.

GTRI said in its latest observation that the US move could potentially open new avenues for Indian manufacturers to increase exports to the US, capitalising on the shift in trade dynamics caused by the tariffs.

“A steep 125 per cent 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 US imported over USD 148 billion worth of such products, with China alone supplying USD 105.9 billion–nearly 72 per cent of the total. India’s share was just USD 4.3 billion, or 2.9 per cent.

The report highlighted that due to China’s 125 per cent import tariffs, a large gap has opened in the US markets, which the 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 enlists the products that can be supplied to the US by small Indian manufacturers.

These high potential products are Fireworks, Plastic tableware, kitchenware, Locks, Hand tools like pliers and spanners, electric appliances, Hair dryers, and Electric space heaters are prominent among others.

The US imports USD 581 million worth of fireworks annually, with China accounting for 96.7 per cent of that. Indian exports, in comparison, stand at a mere USD 0.24 million, creating a huge potential for the manufacturers.

For plastic tableware and kitchenware, the US imports USD 4.97 billion worth of these products annually, 80 per cent of which comes from China. India’s share is only 0.49 per cent, or USD 171.65 million. With current prices of USD 1.25 to USD 16 expected to rise to USD 2.81 to USD 36 post-tariff, clusters in Dadra & Nagar Haveli, Daman, and Gujarat–already major plastic goods producers–can fill the gap if logistics and incentives align, the GTRI added.

The report added that locks are another promising category. The US imports USD 1.196 billion worth of locks each year, 66.3 per cent from China. India contributes USD 30.7 million, just 2.57 per cent, according to the GTRI data.

Hand tools like pliers and spanners are part of a USD 1.138 billion US market. China holds a 52.9 per cent share, while India has built a strong base at 17.7 per cent, exporting USD 202 million.

In conclusion, the GTRI said that India’s small-scale industrial ecosystem needs to develop depth, scale, and capability to seize this opportunity. It added that it must be backed by the right mix of incentives and strategic support.

The report recommended enhancing RoDTEP (Remission of Duties and Taxes on Exported Products) and duty drawback rates for identified products.
It also added that DPIIT and the Ministry of MSME should help clusters modernise to meet US quality and compliance norms.

Going further, the GTRI recommended the launch of an empowered online facilitation cell to guide Micro, Small and Medium Enterprises (MSMEs) on regulatory procedures and certifications needed to enter the US market. (ANI)