India Increases Scrutiny on Low-Cost Chinese Imports Following US Tariff Hike

New Delhi(The Uttam Hindu): India has significantly ramped up its vigilance to prevent the influx of cheap Chinese imports into the country following the steep tariff hike imposed by the United States on goods exported by China. Commerce Secretary Sunil Barthwal has reportedly held several meetings to assess the situation. Government officials are in constant communication with industry leaders to understand the ground reality and devise a strategy to safeguard the Indian economy. The Commerce Ministry has already been monitoring goods like Chinese steel, which had adversely impacted the domestic industry after the previous round of US tariff hikes. Now, the scope of vigilance has been expanded to include other products as well, according to a senior government official.

While the US has raised tariffs for all countries, China has been the hardest hit, with President Donald Trump's decision to impose an additional 34 percent tariff, pushing the total duty on Chinese goods to 54 percent. In retaliation, China has imposed similar duties on all American imports and placed export restrictions on key rare earth metals vital for electronics and defense sectors. China has also targeted several US companies, particularly those in defense-related industries, as part of its retaliatory actions. India's exports to the US account for just 4 percent of its GDP, meaning the direct impact of the 27 percent tariff hike on Indian goods announced by President Trump will be "limited," according to an SBI Research report. The tariffs on Indian goods are the lowest among its Asian counterparts. For example, China faces a 34 percent tariff, Thailand 36 percent, Indonesia 32 percent, and Vietnam 46 percent. This provides India with a comparative advantage, and over time, it could result in increased exports in certain sectors.

While textile export-oriented countries like Bangladesh, China, and Vietnam may experience a decline in demand due to inflationary pressures from the tariff hike, India is poised to gain in the long term. India's textile exports to the US were valued at around $7 billion from April to December FY25, which could be negatively impacted in the short term but benefit India in the long run. In the electronics sector, where China faces tariffs ranging from 54 to 79 percent, India finds itself in a stronger position compared to other major electronics exporters. India’s electronics exports to the US were worth approximately $9 billion from April to December FY25, representing 15 percent of total exports.