PTI New Delhi

A recent decision by the US and China to suspend their tariff hikes for 90 days presents both challenges and opportunities for India, according to exporters. The two countries have reached an agreement to significantly reduce most of their recent tariffs or import duties for 90 days, as they are in talks to resolve their trade disputes.

US Trade Representative Jamieson Greer has said the US agreed to reduce its 145 per cent tariff on Chinese goods by 115 percentage points to 30 per cent, while China agreed to cut the rates to 10 per cent. Federation of Indian Export Organisations (FIEO) President SC Ralhan said the announcement reflects a significant thaw in trade tensions between the two largest economies.

"While such developments are broadly positive for global trade stability, they present both challenges and opportunities for India," he said, adding that the reduction in tariffs will likely result in a surge of US-China bilateral trade in high-value segments like electronics, machinery, and chemicals. This may intensify competition for Indian exporters in markets like Southeast Asia, Africa, and Latin America, where India has recently made inroads, capitalising on US-China trade disruptions, he noted.

However, Ralhan said, India can leverage this shift to strengthen exports in sectors that remain relatively insulated from US-China trade, such as pharmaceutical APIs, gems and jewellery, engineering goods, organic chemicals and IT-enabled services.

"India must proactively engage with the US to secure and expand its preferential trade access, emphasising its role as a reliable alternate sourcing destination," he added. The temporary nature of the tariff cuts may lead companies to hedge against future volatility by expanding manufacturing in India under the Make in India and PLI schemes, especially in electronics, auto components, and textiles, Ralhan noted.