Indian Exporters Front Load Consignments to US During 90-Day Tariff Pause

Indian exporters are capitalising on a 90-day tariff pause announced by the US administration under President Donald Trump. Sectors like gems, jewellery, footwear, and garments are increasing shipments to the US. Exporters believe it's wise to send more goods now due to uncertainty about future tariff extensions. Indian companies need to boost production as the US has imposed a 245% tariff on Chinese goods.

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The Federation of Indian Export Organisations (FIEO) President, SC Ralhan, highlighted that some exporters are taking advantage of this pause. He noted that China's main exports to the US include electronics, computers, machine parts, and more. With high duties in place, there's significant export potential for India. Ralhan emphasised the need for measures to enhance export competitiveness and address logistics and infrastructure gaps.

Export Opportunities Amid Tariff Changes

Ralhan also suggested easing regulatory burdens and improving access to affordable credit. The US imposed an additional 26% import duty on India but suspended these tariffs for 90 days until July 9. An exporter from the leather sector mentioned that some traders are sending goods during this pause. The footwear sector is assessing the situation amid confusion, according to Farida Group Chairman Rafeeq Ahmed.

Concerns have arisen about potential dumping of goods into India from China. The government has formed an inter-ministerial import surge monitoring group. High tariffs on countries like China and Vietnam might lead to goods being diverted to India. Chinese retaliatory tariffs on US goods could also increase US agricultural product inflow into India.

Trade Dynamics Between India, US, and China

The US agricultural exports to India were valued at USD 1.6 billion in 2024. Key exports included almonds in shell at USD 868 million, pistachios at USD 121 million, apples at USD 21 million, and ethanol ethyl alcohol at USD 266 million. The US may aim to push more such exports, with dairy being another key sector of interest.

The US remained India's largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade reaching USD 131.84 billion. Meanwhile, India's trade deficit with China widened to USD 99.2 billion during the same period. In the last fiscal year, India's exports to China decreased by 14.5% to USD 14.25 billion compared to USD 16.66 billion in 2023-24.

Imports from China increased by 11.52% in 2024-25, reaching USD 113.45 billion compared to USD 101.73 billion in the previous year.