India Could Benefit From US’ Reciprocal Tariffs On Trading Partners Like China: NITI Aayog
The US earlier levied additional tariffs of 20-25 per cent on imports from major trade rivals, like China, Mexico, and Canada, giving Indian exporters a potential competitive edge, the think tank said
The United States’ decision to impose fresh reciprocal tariffs on its trading partners from April 2 is expected to create new opportunities for India, according to an initial analysis by the NITI Aayog.
The US earlier introduced additional tariffs of 20-25 per cent on imports from major trade rivals, including China, Mexico, and Canada, which could give Indian exporters a competitive edge, the think tank said.
Notably, China, Mexico, and Canada collectively account for half of the US’ total imports, valued at over $3 trillion. These nations are among India’s primary competitors in the American market, reported Business Standard.
“We are looking at the data at a disaggregated level ... these are preliminary results … reciprocal tariffs are not going to affect (India) except specific sectors and there are opportunities to capture,” NITI Aayog Programme Director Pravakar Sahoo stated on Friday. However, he did not disclose which industries stand to gain or lose from these policy shifts.
US Protectionism and Its Implications
Since assuming office in January, President Donald Trump has reinforced protectionist measures under his "Make America Great Again" agenda. On March 12, the US levied a 25 per cent tariff on steel and aluminium imports, and a similar duty on automobiles is set to take effect on April 3.
Although Trump has previously criticised India’s high tariff regime and ruled out any special exemptions, he recently appeared to soften his stance. Without naming specific nations, he hinted that some countries might receive relief on April 2, suggesting that the new tariffs could be “more lenient than reciprocal.”
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India’s Trade Dynamics
The NITI Aayog also released the latest edition of its “Trade Watch Quarterly” report, analysing trade data from the July-September quarter of the ongoing financial year. The report underscored that India’s contribution to global trade remained significant only in niche segments that do not witness substantial worldwide demand.
“The EU, Northeast Asia, North America, and ASEAN account for 77 per cent of global trade and 74 per cent of global imports, yet India’s trade with these regions is only 8 per cent, and it caters to just 6 per cent of their import demand,” the report noted.
India’s top export categories—electrical machinery, mineral fuels, and nuclear reactors—aligned with global import trends in these key regions. However, China and the US dominated these sectors, with China leading in electrical machinery and nuclear reactors. India’s share remained minimal, comprising only 1-2 per cent of these import categories.
The report further highlighted that India’s trade share is disproportionately concentrated in South Asia, East Africa, and Southern Africa, regions that collectively account for just 2 per cent of global trade. “Top imported commodities of these regions are mineral fuels and nuclear reactors with India’s key exports to these regions including natural and cultured pearls and mineral fuels, where Russia and the UAE are the leading competitors for mineral fuels,” the report noted.
The latest report also shed light on India’s textile trade, an industry that has struggled to gain momentum in recent years. Despite being a traditionally strong sector, textile and apparel exports remained stagnant at around $40 billion for the past six years, growing at a sluggish rate of just 0.8 per cent annually—well below the global industry’s average growth rate of 3.5 per cent.
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