India Seeks $25B Export Gains from US-China Tariff War

India Eyes $25 Billion Export Opportunity in US Amid China Tariff Dispute

Strategic Export Push

Ahead of the Union Budget 2025-26, exporters have urged the finance ministry to approve a US-focused marketing scheme. This scheme, worth Rs 750 crore, aims to generate an additional $25 billion in exports to the US over the next three years. The US’s plan to impose higher tariffs on China presents a significant opportunity for Indian exports.

Target Sectors

These sectors include electronics, electrical equipment, footwear, textiles, garments, furniture, automotive parts, toys, and chemicals. Particularly, consumer electronics such as mobile phones and televisions are expected to see the largest gains, potentially adding $10 billion in exports.

Proposed Measures

To achieve this, the Federation of Indian Export Organisations (FIEO) has proposed increasing India’s presence in the US. This includes exhibitions, buyer-seller meetings, and partnerships with local retailers. Consequently, they suggested a marketing scheme with a yearly corpus of Rs 250 crore for three years to reach the $25 billion target.

Additional Support

Moreover, FIEO has requested a tax deduction of 200-250% for research and development spending. This would foster product innovation. At a pre-Budget meeting, exporters called for the continuation of the interest equalisation scheme, additional funds for marketing, and income-tax relief for MSMEs.

Interest Equalisation Scheme

The interest equalisation scheme (IES) offers interest rate benefits for export credits, with the government compensating lenders. Thus, this initiative eases the financial burden on exporters, especially those in labour-intensive sectors and MSMEs. FIEO noted that a long-term IES would help exporters secure more orders.

Compliance and Sustainability

Furthermore, exporters emphasized the need for government support for energy audits and compliance with carbon border tax. They recommended reimbursing 50% of these costs and providing targeted support for compliance with carbon border adjustment mechanisms.

Conclusion

In conclusion, India aims to capitalize on the US-China tariff dispute by boosting exports to the US. The proposed measures and support schemes are expected to enhance India’s export performance and provide significant economic benefits.