News / Indian exporters elated as they escape Trump's tariff plan

© Decha Anunthanapong

A glaring “target exclusion” in US president-elect Donald Trump’s initial tariff action plan has bred a sense of euphoria among Indian shippers and industry stakeholders eyeing further gains from the trade diversification in Asia.  

Mr Trump, in a public announcement last week, trained his tariff guns on China, Mexico and Canada, with an additional 10% load threatened on Chinese imports, while the neighbour countries face a 25% tariff.  

That’s good news for an Indian export trade facing demand challenges, and also for container lines that have expanded capacity on India-US east coast trade in anticipation of long-term growth, industry sources believe.  

The US has been India’s top trading partner, by value of goods, in recent years. In fiscal year 2023-24, India exported goods worth some $77.5bn to the US, with imports valued at some $42.2bn, according to available data.

Overall, there have been tangible supply chain gains for India from western importers increasingly seeking alternatives to Chinese suppliers. Electronics manufacturing in India is the vertical that has benefited the most from that diversifying trend.  

And Indian digital industry leaders believe a more intense tariff war between the US and China could turbocharge manufacturing investments.   

Amar More, CEO of Mumbai-based Kale Logistics Solutions, told The Loadstar India, as a manufacturing destination, has been bolstered by large-scale infrastructure improvements, policy reforms and strong long-term economic indicators.  

“India stands poised to benefit from the structural shifts in global trade dynamics, as rising tariffs encourage diversification of supply chains,” said Mr More. 

That growth path is yielding results. Apple’s iPhone production by value in India hit a record $10bn from April through October, as the electronics giant plans to further consolidate operations in the new market.  

Apple is not alone in an India push. Finland’s HMD Global, which makes Nokia-branded smartphones, has also unveiled plans to cement its presence in India by downsizing operations in China.  

Home-grown companies are also pouring millions into electronics production developments. Tata Group, which owns Air India, has just concluded a deal for a 60% stake in Taiwanese contract manufacturer Pegatron’s sole iPhone production plant in the southern state of Tamil Nadu, capable of producing some 5m units annually.  

The move complements Tata’s takeover of Taiwan-based Wistron’s Indian manufacturing operations for iPhones a year ago, a $125m deal that included four assembly lines. 

Additionally, as Bangladesh grapples with serious challenges on multiple fronts, India’s apparel exporters have an opportunity to exploit the sourcing shift. And have had some early success: Indian RMG exports by value swelled 25% year on year in October, following a 17% increase in September and a 12% rise in August, industry data shows.  

“This is the time when the supply chain is getting re-aligned due to the Bangladesh crisis and global buyers are looking for China alternatives,” said Mithileshwar Thakur, secretary general of India’s Apparel Export Promotion Council. “India is fast emerging as the preferred sourcing destination for international buyers and big brands.” 

 You can contact the writer at [email protected].