Indian firms likely to gain due to US-China tariff war

Question: Will India benefit from the US-China tariff war which is taking place at present? What is going to be the likely impact?

- HP Ranina

ANSWER: President Trump has signed an order imposing stiff tariffs on imports from China. Likewise, China has imposed a 15 per cent tariff on export of US coal and liquefied natural gas and 10 per cent on its oil and agricultural equipment. These tariffs would push prices of goods sold in the American market, making them less competitive.

India is likely to gain on account of this trade war between the two major economies and Indian exporters of electrical machinery and components, auto components, mobile phones, pharmaceutical products, chemicals, and fabrics are expected to be the beneficiaries. In the recent budget, the Indian Government has reduced customs duties on motorcycles, Ethernet switches and ground installation products for satellites which will benefit American exporters and boost the Indo-US trade.

During the first term of President Trump, India was the fourth largest beneficiary when US imposed higher duties on Chinese goods. During April to December of the current financial year ending on 31st March, 2025, India’s goods exports to the US are estimated to be around $ 60 billion and imports are of $33.4 billion.