In a significant move, U.S. President Joe Biden has announced a sharp tariff increase on $18 billion worth of Chinese goods. This policy shift opens a substantial window of opportunity for India to boost its exports to the American market. Industry experts and market analysts highlight that India could significantly increase its supply of aluminium, steel, and medical goods—including facemasks, PPE, syringes, needles, and gloves—to the U.S.
This potential surge in Indian exports comes amid strengthening bilateral economic ties between India and the United States. During Prime Minister Narendra Modi's state visit to the USA in June 2023, both nations agreed to end all outstanding bilateral trade disputes pending at the World Trade Organisation. This historic resolution paves the way for deeper economic collaboration and positions India as a key beneficiary of the new U.S. tariff regime on Chinese products.
As India steps into this opportunity, it stands to not only bolster its export economy but also reinforce its strategic economic partnership with the United States. This development is not just about economic gains but also about India's strategic positioning in the global trade landscape, underlining the importance of this partnership.
In a significant move to de-escalate trade tensions, the United States has agreed to lift the 25 per cent import duties on certain steel products and 10 per cent on specific aluminium products, which were previously imposed under the guise of national security concerns. This decision marks a step towards restoring more amicable trade relations between the two nations.
In response to this development, India has reciprocated by removing its retaliatory tariffs on a range of American goods, including chickpeas, lentils, almonds, and walnuts. This exchange of concessions underscores a mutual effort to bolster economic ties and pave the way for smoother bilateral trade.
Ashwani Kumar, President of the Federation of Indian Export Organisations (FIEO), said, "The US move to ramp up duties on Chinese goods provides an opportunity for India and other competitors to chip in the supply gap. Of the products affected by additional duties on China, India has opportunities in facemasks, PPE, syringes and needles, medical gloves, aluminium, and iron and steel."
"China is sitting on overcapacity in many sectors, and thus, the threat of dumping is not ruled out, especially when an important market is closed for exports. However, I am sure the industry and the government will be keeping a close watch on imports, and if a surge or dumping happens, DGTR will take appropriate action to safeguard our industry."
Following Prime Minister Modi's talks in Washington, trade disputes were settled in one go. Subsequently, the US agreed to allow the import of 336,000 tonnes of steel and aluminium from India, waiving the additional duties imposed under a national security law by the Trump administration in 2018.
The US Department of Commerce has reportedly announced a preliminary determination on aluminium extrusions imported from India that are being sold at unfairly low prices in the US domestic market. The Department has conducted a preliminary determination on those aluminium extrusions used in racking, trackers, and mounting frames for solar panels, allowing them to be subject to additional tariffs. The initial findings suggest a dumping margin of 3.44 per cent and 39.05 per cent on Indian extrusion manufacturers.
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