Amid concerns over potential export disruptions due to US reciprocal tariffs set to take effect on April 2, the Ministry of Commerce and Industry has urged Indian businesses to explore replacing imports from China and other countries with goods sourced from the United States.
The move follows US President Donald Trump’s criticism of India’s high tariffs on automobiles and agricultural products. In response, the Indian government is considering tariff reductions and expanded market access for US goods to prevent sweeping American trade restrictions.
Commerce Minister Piyush Goyal emphasised the need for a proactive approach, urging exporters to look beyond protectionism and adapt to evolving trade dynamics.
During a meeting with industry stakeholders, officials discussed how new tariffs would impact Indian exporters, particularly in steel and aluminium.
The 25% tariff imposed by the US on these metals has already affected $5 billion worth of Indian exports, with MSMEs being the most vulnerable.
“The MSME sector is especially concerned, as a significant portion of these exports come from small and medium enterprises,” said Pankaj Chadha, Chairman of the Engineering Export Promotion Council (EEPC) India.
He highlighted that nearly $1 billion worth of shipments currently en route to the US will be subject to the new tariffs.
Industry leaders also suggested increasing US market access in sectors like textiles, electronics, and gems and jewellery.
Some exporters noted that India could benefit from shifting global supply chains, as rising tariffs on China and Mexico may drive demand toward Indian manufacturers.
Meanwhile, the WTO warned that global trade could face volatility, with businesses rushing imports ahead of expected tariff hikes. While trade activity remains strong, uncertainties could impact demand later in the year.