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Time of India
16 hours ago
- Business
- Time of India
India has edge in minerals, fuels, electronics under current US tariffs: Niti Aayog
India stands to gain in sectors with high tariff gaps vis-a-vis competing nations like China, Canada and Mexico if the existing tariffs imposed by the US, as on July 10, on India remain unchanged, Niti Aayog said. The Aayog's analysis, which is part of its Trade Watch Quarterly report for October-December quarter of 2024-25 released on Monday, comes at a time when India is in the final leg of firming up a trade deal with the US. As per the report, the sectors where India stands to gain include minerals and fuels, apparel, electronics, plastics, furniture and seafood. The Aayog has pegged the market size for these products at $1,265 billion. The report said India is expected to gain competitiveness in 22 out of top 30 products in the HS 2 categories, representing a market size of $2,285.2 billion and in 78 products out of top 100 in HS 4 categories. It further explained that China, Canada and Mexico are the leading exporters to the US in these categories, therefore higher tariffs on these countries at 30 per cent, 35 per cent and 25 per cent, respectively, will enhance India's competitiveness. "Significant opportunity for India in US markets both in terms of the number of products and volume of the US market," the Aayog said in its report. "India's relative tariff advantage vis-a-vis major competitors presents a strategic window to expand market share in the US market, especially in sectors such as pharmaceuticals, textiles, and electrical machinery, among others," it said.>
Time of India
16 hours ago
- Automotive
- Time of India
US tariffs offer India a trade opportunity, auto sector among key beneficiaries: NITI Aayog
New Delhi: Higher tariffs imposed by the United States on major trading partners such as China, Canada and Mexico could open a strategic trade window for India, with sectors including automobiles, auto components, and electrical machinery poised to benefit, according to a new report by NITI Aayog, Economic Times reports. The report, released in the latest edition of the government think tank's Trade Watch Quarterly, outlines how India could gain competitiveness in 22 of the top 30 product categories (at the HS-2 level) exported to the US. Notably, several of these categories include automotive-related goods and electronics, where India has been steadily scaling up production capacity under various incentive schemes. This shift follows steep import tariffs introduced by the Trump administration—30 per cent on Chinese goods, 35 per cent on Canadian, and 25 per cent on Mexican imports—which have significantly altered trade dynamics. For Indian exporters, this presents an opportunity to expand market share in the world's largest consumer economy, the report said. 'India's relative tariff advantage vis-a-vis major competitors presents a strategic window to expand market share in the US market, especially in sectors such as pharmaceuticals, textiles, and electrical machinery,' NITI Aayog stated. The analysis also highlights opportunities for India's mineral fuels, plastics, furniture, and seafood exports—industries tied closely to broader manufacturing and supply chains, including the auto sector. Auto and Electronics Could Gain The evolving tariff regime could particularly support Indian manufacturers of EV components, semiconductors, and other electrical systems used in automotive production. As global automakers diversify sourcing away from China, India may emerge as a cost-competitive alternative for US-bound automotive supplies. India's growing EV ecosystem—supported by schemes like FAME and PLI—places it in a strong position to supply components and systems for the American auto market, provided trade terms are favourable. However, the report warns that any gains will depend on swift, sector-specific policy responses from the Indian side. Strategic Trade Talks Underway Amid this changing landscape, a delegation from India's commerce ministry has arrived in Washington for another round of talks on a proposed bilateral trade agreement. The discussions aim to finalise an interim deal by the fall, with a full agreement potentially materialising thereafter. The US is seeking duty reductions on various industrial and agricultural goods, including automobiles (especially EVs), while India is pushing for better access for its labour-intensive exports such as textiles, gems, footwear, and auto parts. India is also seeking relief from steep US tariffs on its steel (50per cent ), aluminium (50per cent ) and automobile exports (25per cent ). The talks follow earlier rounds held from June 26 to July 2 and are taking place ahead of a new US deadline of August 1 for implementing additional tariffs on multiple countries, including India. Tariff Advantage and Challenges According to NITI Aayog, India's competitiveness remains steady in six key product categories—segments that account for nearly one-third of its US-bound exports. However, India enjoys a relative edge in 78 products that represent over half of its total exports to the US. Still, challenges remain. In six categories, India faces slightly higher average tariffs than competitors, a gap that could be closed through negotiations. Furthermore, in 17 of the top 100 products exported to the US, India's position remains unchanged due to the absence of any tariff differential. Policy Recommendations To fully leverage the shifting trade environment, NITI Aayog has called for the expansion of PLI schemes into labour-intensive sectors such as leather, furniture and handicrafts. It also recommended lowering industrial electricity tariffs through rationalised cross-subsidies and increased renewable energy use—measures aimed at reducing production costs. The report further urged India to explore a services-focused trade deal with the US, following the India–UK model, including provisions for digital trade in IT, finance, and professional services. As India and the US continue negotiating, the outcome could reshape trade flows across multiple sectors—including automobiles—offering Indian exporters a vital competitive edge amid rising global protectionism.
Hans India
17 hours ago
- Business
- Hans India
India and US trade talks intensify as tariffs reshuffle global market dynamics
New Delhi: Indian exports to the US will become more competitive following imposition of higher tariffs by the Trump administration on countries, including China, Canada, and Mexico, NITI Aayog said in a report on Monday. The Aayog in its third edition of 'Trade Watch Quarterly', said there will be significant opportunities for India in the US markets both in terms of the number of products and volume of the US market. 'India is expected to gain competitiveness in 22 out of the top 30 categories (HS 2 level), representing a market size of $2,285.2 billion,' the Aayog said. It further explained that China, Canada, and Mexico are the leading exporters to the US in these categories, therefore higher tariffs on these countries at 30 per cent, 35 per cent, and 25 per cent, respectively, will enhance India's competitiveness. The Aayog said India's competitiveness will remain unchanged in 6 out of 30 categories, amounting for 32.8 per cent exports to the US and 26 per cent of the US total imports, amounting to $26.5 billion. While for six product categories at HS 2 level, India faces a higher average tariff(between 1-3 per cent) which can be negotiated with the US, the Aayog said, 'In 78 products, accounting for 52 per cent of India's exports and 26 per cent share in total US imports, India is expected to gain competitiveness.' For 17 products (accounting for 28 per cent of India's export to the US) out of the top 100 products at the HS-4 level, the Aayog said India's competitiveness remains unchanged due to no change in tariff differential. The Aayog also pointed out that 'India stands to gain in sectors with high tariff gaps vs China, Canada and Mexico -- minerals and fuels, apparel, electronics, plastics, furniture, and seafoods in a $1,265-billion market'. Meanwhile, An Indian commerce ministry team has reached Washington for another round of talks on the proposed bilateral trade agreement (BTA), which will begin on Monday. Chief negotiator of India and special secretary in the department of commerce Rajesh Agrawal will join the team on Wednesday.
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Business Standard
a day ago
- Business
- Business Standard
India eyes tariff advantage in key US sectors over China, Canada, Mexico
Commerce and Industry Minister Piyush Goyal on Monday said that trade talks between India and the United States are progressing rapidly, as Indian negotiators began a week-long round of discussions in Washington. His remarks came on the same day Niti Aayog released the third edition of its 'Trade Watch Quarterly' report, indicating that India is expected to gain competitiveness in 22 of the top 30 product categories (at the HS 2 level) under the current US tariff regime. These categories account for 61 per cent (representing a market size of $49.3 billion) of India's exports to the US and 68 per cent ($2,285.2 billion) of total US imports. This competitiveness offers Indian exporters an opportunity to strengthen their presence in the US market, particularly when its global peers face steeper tariff barriers. The Niti Aayog's assessment assumes that India will face an extra 10 per cent tariff, while many other countries, like China, Mexico, and Canada will face higher tariffs ranging from 20 to 50 per cent. This would enhance India's market potential in nuclear reactors, iron and steel, textiles, electricals, and vehicles. At the HS 4 level, India enjoys a favourable tariff differential in 78 of the top 100 products, which together account for about 52 per cent (representing a market size of $42 billion) of its exports to the US. These findings highlight India's growing export potential to the world's largest consumer economy, mentions the Niti Aayog report. While six of the top 30 (at HS 2 level) product categories maintained status quo on tariff, India's competitiveness remains unchanged. This segments account for 32.8 per cent of its exports to the US worth $26.5 billion, highlighting the scale of opportunity available for Indian exporters. The modest differences open avenues for targeted trade negotiations with the US. India's tariff advantage over China is notable, the report mentions. The average tariff differential stands at 20.5 per cent in India's favour, enhancing its potential to expand market share at China's expense. Among the top 10 product categories, leading exporters to the US in the HS 2 product categories like China, Canada, and Mexico, face tariffs higher than India's by an average of 19.6 per cent. Further, the analysis of the HS 4 level shows that in around 80 of the top 100 products, competitors face higher tariffs than India, reinforcing its export momentum. These products make up a large share of India's exports to the US and of what the US imports, offering India the opportunity to expand its market. Even in categories where India faces higher duties, the tariff differential is typically under 1 per cent, affecting products that make up 24.5 per cent of India's US-bound exports. This narrow differential reduces India's competitive disadvantage, especially as countries like China continue to face escalating trade barriers. As global supply chains realign and trade relationships evolve, India's comparatively lower tariff burden positions it favourably to capitalise on emerging trade corridors, particularly with the United States. The report recommended that India should focus on important service sectors like financial services and IT while negotiating a trade deal with the US. Understanding Harmonised System Under Indian Trade Clarification based on the Harmonized System, HS 2 and HS 4 products refer to the first two and four digits of the Harmonized System (HS) code, respectively. The HS code is a standardised system used to classify traded products, and it's crucial for customs and trade purposes. The product labels under HS 2 category includes electrical machinery, nuclear reactors, mineral oils and products, articles of iron or steel, articles of textile and accessories, fish & crustaceans, plastic & articles thereof, etc. The product labels under HS 4 category includes telephone sets, including smartphones, semiconductor devices, turbojets, petroleum oils, tube and pipe fittings, bed, kitchen and toilet linen, jewellery, etc.
Time of India
a day ago
- Business
- Time of India
US tariff reset boosts India's export edge: Niti Aayog says India gains ground in 100 product lines, services and tech drive Q3 resilience
AI image India stands to expand its footprint in the US market under Washington's evolving tariff regime, with favourable differentials in over 100 key product categories, according to the government think tank Niti Aayog 's Trade Watch Quarterly report for Q3 FY25. 'India is expected to gain competitiveness in 22 of the top 30 product categories at the HS-2 level, covering 61% of its exports to the US and 68% of total US imports in these categories,' the report said. At a more detailed HS-4 level, India has a favourable tariff differential in 78 of the top 100 products, accounting for around 52% of its shipments to the US. The opportunity arises from higher US import tariffs on key trade partners such as China, Canada, Mexico, Vietnam, and Thailand. This policy shift, which includes a baseline 10% duty on all imports since April 2025, presents Indian exporters with a 'strategic window' to gain share in sectors ranging from nuclear reactors and electrical machinery to vehicles, apparel, and textiles. Even in six of the top 30 HS-2 product lines where India faces a tariff disadvantage, the gap is just around 1%, keeping it broadly competitive, the think tank noted. Despite global demand headwinds and geopolitical uncertainty, India's Q3 FY25 trade data reflected 'cautious resilience'. Merchandise exports grew 3% year-on-year to $108.7 billion, while imports rose 6.5% to $187.5 billion—widening the merchandise trade deficit to $78.7 billion. However, services exports surged 17% to $102.6 billion, creating a $52.3 billion surplus that 'partially offset' the goods trade gap. Niti Aayog highlighted that India ranked as the world's fifth-largest exporter of Digitally Delivered Services (DDS) in 2024, clocking $269 billion in exports. This was driven by segments such as IT services, professional consulting, and R&D outsourcing. Among merchandise exports, the report noted a sharp rise in high-tech and value-added sectors. Aircraft, spacecraft, and related parts surged by over 200% and entered the top 10 export categories for the first time, thanks to demand from Saudi Arabia, the UAE, and the Czech Republic. India's high-tech exports reached $80.6 billion in 2024, growing at a CAGR of 10.6% since 2014 and accounting for 18.3% of total merchandise exports. Electrical machinery and parts now make up half of India's high-tech shipments, surpassing nuclear reactors and boilers. In digitally delivered trade, 'Other Business Services' accounted for 53% of 2024 DDS exports, while 'Computer Services' contributed 39%, aligning with global patterns. The think tank stressed that new trade alignments—particularly India's relative tariff edge in the US—underscore the importance of agile policy responses. 'India must deepen global value chain integration, expand production-linked incentive schemes to labour-intensive sectors, and pursue services-focused trade agreements,' the report said. It added that a deal with the US should prioritise digital trade, cross-border data flows, and mutual recognition of standards to further widen India's export footprint. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
