India To Gain Against China, Vietnam Due To High Tariff Differential: NITI Aayog
The report by NITI Aayog comes at a time when India and the US are inching closer towards an interim trade deal.
India is set to gain against China, Vietnam and other competing manufacturing economies due to higher tariffs imposed on the latter, according to an analysis by government think-tank NITI Aayog.
India is expected to take the benefit of the tariff differential, which is calculated as the tariff on competitors subtracted by the tariff on India.
India is expected to gain in products like electrical machinery, mineral fuels, nuclear reactors and boilers, articles of iron or steel, seafood, plastics, pharmaceuticals and organic chemicals.
"At the HS 2 level, 91.4% of India's total exports to the US are analysed, with India expected to gain in 22 out of 30 products analysed, corresponding to a substantial gain with 61% of exports to the US," NITI Aayog said in its Trade Watch report for October-December (Q3) of FY25. "These products also represent 68% share in total US imports, indicating high importance in global trade.
At the HS 4-level, it has identified 78 products with potential gains, with the share of these exports to the US where India can gain at 52%. "The data suggests strong growth opportunities in targeted product categories while highlighting areas where India’s export status is expected to remain unchanged," it said.
The report by NITI Aayog comes at a time when India and the US are inching closer towards an interim trade deal, with an Indian team in Washington for another round of in-person talks ahead of the Aug. 1 deadline for tariffs.
Additionally, the report calls for India to focus on diversifying its trade partners and fast-tracking free trade agreements, particularly the India-EU FTA, with a clear, time-bound negotiation roadmap.
"These agreements should prioritise the reduction of non-tariff barriers and facilitate smoother trade in services, a key strength for India. Simultaneously, deeper trade engagement with countries such as Australia, Japan, South Korea, and ASEAN nations can be highly beneficial," it said.
