Small manufacturers across India could be staring at one of the biggest export openings in years, thanks to a sharp escalation in US tariffs on Chinese imports. A new report by the Global Trade Research Initiative (GTRI) outlines how India’s small businesses — from Aligarh to Sivakasi — can leverage the trade shifts to expand into the US market.
$100 Billion Gap Emerges in US Imports
In 2024, the US imported $148 billion worth of goods now subject to tariffs, of which $105.9 billion (72%) came from China. India’s share stood at a modest 2.9%, accounting for $4.3 billion. With US consumer prices rising across categories like kitchenware, lighting, locks, and fireworks, the GTRI report estimates a $100 billion gap that Indian manufacturers could potentially fill.
The tariff spike, reaching as high as 125% on some goods, has made previously affordable products significantly more expensive in the US. Everyday items have turned into high-margin opportunities for alternative suppliers.
Export Opportunities Across Key Indian Manufacturing Clusters
The report highlights several sectors and clusters well-positioned to seize this moment:
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Fireworks: Sivakasi in Tamil Nadu could become a key supplier, with US retail prices for fireworks expected to double or even triple.
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Plastic Goods: Regions like Dadra & Nagar Haveli, Daman, and parts of Gujarat—already strong in plastic tableware and kitchenware production—could tap into the US market as prices soar.
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Locks and Hand Tools: Aligarh’s lock industry and hand tool hubs in Ludhiana and Jalandhar are seen as strategic clusters with significant potential.
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Electric Appliances: Manufacturing centers in Noida, Baddi, Rudrapur, and Haridwar could address rising US demand for affordable electric goods.
However, GTRI warned that the window of opportunity may be narrow, as the US could shift its sourcing strategies or revise its tariff policies.
Also read: CBFTE Scheme: Financial Support for New MSME Exporters
Strategic Push Needed to Unlock Potential
The report calls for urgent government intervention to help Indian SMEs act quickly:
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Boost Export Incentives: Increase RoDTEP and duty drawback rates to make Indian goods more competitive globally.
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Strengthen Cluster Support: The DPIIT and MSME Ministry should help industrial clusters adopt modern technologies and align with US compliance standards.
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Improve Access to Capital: Revive the interest equalisation scheme to provide affordable export credit to small businesses.
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Facilitate Compliance Navigation: Set up a dedicated online helpdesk to guide SMEs through US regulatory requirements, certifications, and export documentation.
GTRI’s report concludes that with the right support, Indian small manufacturers have a once-in-a-generation opportunity to expand their global footprint and reshape their role in international trade.