FIEO Analyses Impact of US-China Tariff Reductions on Indian Exports: S.C.Ralhan, President , FIEO
The Federation of Indian Export Organisations (FIEO) closely monitors global trade developments that affect Indian trade interests. The recent proposal by China to reduce tariffs on US goods from 125% to 10% for 90 days, and the reciprocal US proposal to cut tariffs on Chinese goods from 145% to 30%, represents a significant thaw in trade tensions between the two largest economies.
City Air News
May 12, 2025 10:07
0
The Federation of Indian Export Organisations (FIEO) closely monitors global trade developments that affect Indian trade interests. The recent proposal by China to reduce tariffs on US goods from 125% to 10% for 90 days, and the reciprocal US proposal to cut tariffs on Chinese goods from 145% to 30%, represents a significant thaw in trade tensions between the two largest economies.
FIEO President recognises that while such developments are broadly positive for global trade stability, they present both challenges and opportunities for India.
The reduction in tariffs will likely result in a surge of US-China bilateral trade in high-value segments such as electronics, machinery, and chemicals. This may intensify competition for Indian exporters in third markets like Southeast Asia, Africa, and Latin America, where India has recently made inroads capitalizing on US-China trade disruptions.
However, India can leverage this shift to strengthen exports in sectors that remain relatively insulated from US-China trade, such as Pharmaceutical APIs, Gems and Jewellery, Engineering goods, Organic chemicals and IT-enabled services etc
India must proactively engage with the US to secure and expand its preferential trade access, emphasizing its role as a reliable alternate sourcing destination. The temporary nature of the tariff cuts may lead companies to hedge against future volatility by expanding manufacturing in India under the Make in India and PLI schemes, especially in electronics, auto components, and textiles, said Mr Ralhan.
FIEO will navigate this evolving landscape and will continue to work with policymakers to ensure India’s trade interests are protected and promoted, added FIEO Chief.
