Donald Trump's tariff war: Does the 125% duty on China make it India's time to shine?

Donald Trump's tariff war: United States President Donald Trump on April 9 said he is “pausing” his reciprocal tariffs on all countries except China. The move brought joy back into the global markets, but China is now slapped with tariffs as high as 125 per cent.

Amid this, we ask: Is this India's time to shine? Yes, believe representatives of the Confederation of All India Traders (CAIT).

Praveen Khandelwal, Secretary General of CAIT and BJP Member of Parliament from Chandni Chowk (Delhi), says Donald Trump's decision to impose 125 per cent tariffs on Chinese goods is “both an opportunity and a challenge for India's trade and industry”.

‘Must Devise Strategic Approach’ Says CAIT Secretary General

According to Khandelwal, trades and small industries in India “must devise a strategic approach to take full advantage of both the opportunity and the challenge that this situation presents”.

His suggestions include creating new export opportunities between India and the US. “As Chinese goods become costlier in the American market, US buyers will begin to look for alternative sources. Indian manufacturers and exporters can step in to fill this gap, particularly in sectors where China has traditionally held dominance. This can open up a new and promising market for Indian exporters in the US,” Khandelwal pointed out.

‘Could Trigger a Major Shift in Global Supply Chain’

Also optimistic, BC Bhartia, National President of CAIT, thinks the US-China trade war could trigger a “major shift” in the global supply chain.

“If the US and other countries are looking to reduce their dependency on China, India has the potential to emerge as a reliable alternative supply partner. With initiatives like Make in India and the production-linked incentive (PLI) scheme in place, India is increasingly being seen as a strong manufacturing base, which could help attract investment into the country’s manufacturing and technology sectors,” Bhartia pointed out.

Silver Lining for Trump Tariffs: Stronger Global Competitiveness?

Both Khandelwal and Bhartia feel that Trump’s tariff policy would strengthen global competitiveness. While Chinese products become more expensive, Indian products could be an attractive alternative, giving Indian traders a “clear advantage."

The traders also feel that the situation “brings great promise” but has short-term uncertainties. “The sudden change in global trade dynamics might result in fluctuations in raw material prices and impact logistics, both of which need to be closely monitored,” they noted.

Which Indian Industries Could Benefit from Trump's China Tariffs?

According to Khandelwal, the extent to which India benefits will depend on how quickly and efficiently the country’s trade and industry sectors are able to adapt their strategies.

“Key sectors such as electronics and mobile manufacturing, pharmaceuticals and APIs, textiles and apparel, engineering goods and auto components, chemicals and speciality chemicals, IT services, and electronics design, and FMCG products, among others, could benefit significantly,” said he. 

“Although tariffs do not directly affect services, the current geopolitical climate enhances India’s position as a trusted technology partner for the US,” the CAIT statement said.