India stands to benefit as the US slaps higher tariffs on major exporters like China, Canada, and Mexico across key sectors.
The US currently imposes around 30–35% tariffs on goods from countries like China and Canada, while tariffs on Indian goods remain unchanged. This gives Indian products, including electronics, fuels, seafood, plastics, and furniture, a better shot at the US market. The Aayog estimates the market size for these items at approximately $1.265 trillion.
The report, which analyses trade data from October to December 2024, reveals that India holds a tariff advantage in 22 out of the top 30 product categories imported by the US. These categories encompass goods valued at over $2.285 trillion, including essential items such as electronics, fuels, minerals, and textiles.
According to the analysis, India’s competitiveness remains consistent in six out of the top thirty HS 2-level categories, which collectively represent 32.8% of its exports to the US and 26% of total US imports, amounting to $26.5 billion.
However, a more compelling narrative emerges from the potential opportunities. India could make significant gains in 78 products that account for over half (52%) of its exports to the US and a quarter of total US imports. These products include minerals and fuels, apparel, electronics, plastics, furniture, and seafood, encompassing a substantial market valued at $1.265 trillion.
To tap into this advantage, NITI Aayog suggests expanding incentives for sectors like leather and handicrafts. Lowering electricity costs and promoting renewable energy in manufacturing were also flagged as key steps.
This tariff gap appears during a crucial phase in India-US trade talks. With new US tariffs kicking in for some countries from August 1, India may continue to benefit, but only if policy support keeps pace.
