Thanks to the US tariffs on Chinese imports, Indian small manufacturers might be staring at their biggest export break in years. A sweeping 125 per cent tariff by the US on Chinese imports has pushed up prices of common consumer items like kitchenware, lighting, and small appliances across American retail shelves. As China supplied the bulk of these imports, the tariffs have created a void, providing Indian manufacturers with a window to seize the opportunity.
A new report by the Global Trade Research Initiative (GTRI) estimates that in 2024, the US imported $148 billion worth of goods now hit by tariffs—of which China accounted for $105.9 billion, or 72 per cent. India, meanwhile, accounted for only $4.3 billion, or 2.9 per cent of these imports. With US prices rising, that leaves a $100 billion gap Indian SMEs could look to fill.
“Indian producers already make many of these goods—from locks to lamps to plasticware—but mostly at a small scale,” said the GTRI report titled The Trump Tariff Shock Creates $100 Billion Opportunity for Indias Small Manufacturers.
“With the right push from the government on export incentives, product certifications, and financing, these firms could expand quickly and tap into this US$ 100 billion opening,” the report said while cautioning that the window is narrow and may not stay open for long.
The tariff spike has made everyday products into high-margin opportunities. Fireworks, for instance, will be almost unaffordable with the retail prices increasing to between $33.75 and $135 from the previous $15 to $60. This creates a significant opening for India’s Sivakasi cluster in Tamil Nadu for fireworks manufacturing.
Plastic tableware and kitchenware is another area of opportunity for Indian exporters. According to the report, the US imported $4.97 billion worth of these products annually, 80 per cent of which comes from China.
India’s share here was only 0.49 per cent 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, the report noted.
Locks, hand tools, electric appliances are other areas where Indian manufacturers for instance Aligarh’s lock industry, hand tool hubs of Ludhiana and Jalandhar, and electric appliance clusters in Noida, Baddi, Rudrapur, and Haridwar have export potential to the US.
However, the opportunity is not forever. The report cautioned that the US could turn to other low-cost suppliers or alter its tariff policy and hence, Indian firms will have to act swiftly and scale up with the right support.
To support Indian small manufacturers, the report called for boosting export incentives with increasing RoDTEP scheme and duty drawback rates for key product categories to make Indian exports more competitive. Further, the DPIIT and MSME Ministry should support industrial clusters in adopting modern technologies and aligning with the US standards and compliance norms.
With respect to capital, the interest equalisation scheme to help small firms access affordable export credit should be reintroduced. Lastly, a dedicated online helpdesk to assist MSMEs should be set up for navigating the US regulatory requirements, certifications, and paperwork.