New Delhi: A sharp 125% US tariff on Chinese consumer goods has created a rare, short-term export opportunity worth up to $100 billion for India’s small manufacturers. A report prepared by the Global Trade Research Initiative (GTRI) suggests that India is seizing this opportunity and will require strong government support through export incentives, easier financing and global product certifications.
GTRI founder Ajay Srivastava told ETV Bharat that in 2024, the US imported $148 billion of such goods with China supplying 72 per cent and India only 2.9 per cent. As Chinese products become more expensive, Indian firms—already producing many of these items at small scale—have a chance to step in. The window is narrow and time-sensitive, but still India has an opportunity to rise to the occasion.
Reports suggest that everyday consumer items that were once cheaply sourced from China will now cost much more in American stores. This gives Indian small and medium-sized firms a real chance to step in. In 2024 US imported over $148 billion worth of such products, with China alone supplying $105.9 billion of the total. India’s share was just $4.3 billion then. With Chinese goods now sharply more expensive, a large gap has opened in the US market.
Short term opportunity
Indian producers already make many of these goods—from locks to lamps to plastic ware but mostly at a small scale. With the right push from the government on export incentives, product certifications, and financing, these firms could expand quickly and tap into this $100 billion opening. But the window is narrow—and may not stay open for long.
Key product categories
Fireworks- The US imports $581 million worth of fireworks annually, with China accounting for 96.7% of that. Indian exports, in comparison, stand at a mere $0.24 million. With current US prices ranging from $15 to $60, the new tariffs would raise retail prices to between $33.75 and $135. This creates a significant opening for India's Sivakasi cluster in Tamil Nadu, a global hub for fireworks manufacturing that could scale up quickly with assistance in meeting U.S. safety and compliance norms.
Plastic tableware and kitchenware- US imports $4.97 billion worth of these products annually, 80% of which comes from China. India’s share is only 0.49%, or $171.65 million. With current prices of $1.25 to $16 expected to rise to $2.81 to $36 post-tariff, clusters in Dadra & Nagar Haveli, Daman, and Gujarat—already major plastic goods producers—can fill the gap if logistics and incentives align.
Plastic household and sanitary products- Though Indian exports here are still modest, manufacturers in Haryana’s Bahadurgarh and Maharashtra’s Nashik and Bhiwandi have the production capability. As US prices rise on Chinese goods, India can become a competitive alternative with better packaging, safety standards, and market linkages.
Locks- The US imports $1.196 billion worth of locks each year, 66.3% from China. India contributes $30.7 million, just 2.57%. With current retail prices of $10–$50 jumping to $22.50–$112.50 due to tariffs, manufacturers in Aligarh, Uttar Pradesh—already known for traditional and smart locks—can expand rapidly to serve this new demand.
Hand tools- Tools like pliers and spanners are part of a $1.138 billion US market. China holds a 52.9% share while India has built a strong base at 17.7%, exporting $202 million. US retail prices are expected to rise from $10–$50 to $22.50–$112.50. Punjab’s Ludhiana and Jalandhar clusters, globally recognized for hand tools and agricultural implements, are well-positioned to scale further.
Iron or steel- Nails, tacks, and pins are another everyday product that India has an opportunity to manufacture. US imports of $1.113 billion, with 61.3% from China. India exports only $30 million (2.7%), but could scale up. US prices could jump from $2–$10 to $4.50–$22.50. Indian clusters in Howrah (West Bengal), Pune, and Ludhiana are equipped to meet new demand.
Electric Appliances- There is untapped potential in this sector too. The US imports $924 million worth of electric hair clippers, 82.8% from China. India’s share is just 0.83% or $7.7 million. Retail prices of $14–$50 could increase to $31.50–$112.50. Electronics hubs in Noida, Bhiwadi, and Baddi already have basic assembly capabilities and could expand with modest investment in technology and testing.
Electric lamps and lighting fittings- US imports $775 million worth of these, 74.2% from China. India already has a decent share at $67 million (8.6%). Current retail prices of $75–$400 could rise to $168.75–$900. The LED hubs of Morbi (Gujarat), Pune, Noida, and Bengaluru can be activated quickly to serve export orders.
Hair dryers- This could be another high-potential category. US imports $743 million annually, 87.1% from China. India’s share is only $1.35 million or 0.18%. With prices expected to increase from $15–$60 to $33.75–$135, manufacturers in Baddi, Haridwar, and Rudrapur—already producing small appliances—could shift towards export-focused production with some tweaks.
Electric heaters- This category represents a $1.065 billion US import market, where China has a 90.5% share. India’s exports are currently $9.36 million or 0.88%. As prices surge, appliance clusters in Noida and Pune could expand output with upgraded safety and design features.
Electric Shavers- Even in categories where India currently has little presence, like electric shavers, there is room to grow. With Chinese prices expected to rise from $11–$65 to $24.75–$146.25, Indian clusters in Greater Noida, Manesar, and Pune could explore this as a new export category with minimal capacity additions.
Vacuum cleaners- They are currently priced between $45–$282, and will now cost $101.25–$634.50 if sourced from China. While this is a more complex product, Indian firms like Bajaj and Usha could consider entering the segment through contract or OEM manufacturing for global brands.
Immersion rods and Geysers- we are already manufacturing these products in India for domestic and African markets. This could be another area to watch. In the US, prices currently range from $600–$2,500 and may now rise to $1,350–$5,625. Indian clusters in Baddi, Rudrapur, and Neemrana, which house manufacturers like Racold and Havells, are ready to tap this demand.
Electric fans- US prices are likely to jump from $20–$100 to $45–$225. India is already a major global exporter of ceiling and table fans. Clusters in Hyderabad, Kolkata, and Faridabad—home to companies like Crompton, Usha, and Orient—can expand quickly to supply the U.S. market.
To seize this rare export opportunity created by steep US tariffs on Chinese goods, the country's small-scale industrial ecosystem must rapidly develop greater depth, scale and competitiveness. This requires not only a strategic blend of policy incentives but structural support also. Government can take key actions including enhancing export benefits such as RoDTEP and duty drawback rates for targeted products, enabling technology upgrades through coordinated efforts by DPIIT and the Ministry of MSME, and improving access to affordable export credit by reintroducing the interest equalisation scheme for small firms.
Additionally, launching a dedicated online facilitation cell can help MSMEs navigate complex regulatory requirements and obtain necessary US certifications. Swift, coordinated action is essential to turn this narrow window into a lasting export breakthrough.
