As the United States increasingly diversifies its import sources away from China, India’s share in US imports has risen notably across several sectors, reflecting both global realignment of supply chains and the direct impact of heightened US tariffs on Chinese goods.

Electronics have driven much of this growth for India, particularly in smartphones and solar cells, where exports surged 47% in the April-June period to reach USD 12.41 billion.

This expansion highlights India’s growing role as a manufacturing and export hub, bolstered by initiatives like the shift of some global smartphone production from China to India, as exemplified by major tech firms such as Apple expanding their manufacturing footprint in India.

The US, with its sustained consumer demand, remains the largest export destination for Indian electronics, now accounting for about a third of total exports in this sector.

Textiles show a similar trend: China’s share of US textile imports fell sharply from 27% to 14%, while India’s share increased from 9% to 12%, and Vietnam’s from 14% to 18%. This concurrent decline by China and gains by India and Vietnam point to diversified supply strategies by US importers, who are seeking alternatives to Chinese producers amid ongoing trade tensions.

In agriculture and marine products, China’s position has weakened considerably, with its share in the US market dropping from 3.5% to 1.5%. Despite minimal overlap in specific export commodities, India grew its share from 1.7% to 2.2%. Here, countries like Indonesia and Vietnam have also absorbed part of China's lost share, particularly in agriculture.

Trade data for the first quarter of 2025-26 confirms robust Indian export momentum: India, Mexico, and the European Union have all recorded positive growth in exports to the US, while China has witnessed the sharpest decline among G20 nations, with exports to the US falling by around 5%. The drop in China’s exports to the US is primarily due to punitive tariffs, which have been raised to as much as 55% on many Chinese goods. Even after a temporary bilateral agreement, tariff rates remain a strong deterrent for US importers of Chinese goods.

By contrast, Indian goods entering the US market generally face an additional 10% duty, alongside sector-specific surcharges—50% on steel and aluminium, and 25% on autos and parts—which, while significant, are still less prohibitive compared to those imposed on Chinese exports. However, experts caution that such high US duties on metals and chemicals do constrict India’s export potential in those segments.

For example, India’s share in US chemical imports declined from 4.4% to 3.5% between May 2024 and May 2025, partly due to these tariff uncertainties and elevated US domestic prices for those commodities.

Meanwhile, the pharmaceutical sector remains stable for Indian exporters, with India maintaining around a 40% share of US generic drug imports—a position bolstered by the competitiveness of Indian pharma products, which are often 30-80% cheaper than rivals. Despite political rhetoric threatening even steeper duties on pharmaceuticals, India’s price advantage is expected to protect its market share in the near term.

China’s share of US imports has dropped to 7.1% as of May 2025, its lowest since 2001, due to both market-driven and policy-induced shifts. India is emerging as a key beneficiary in this environment, particularly in high-growth, high-value segments like electronics, textiles, and pharmaceuticals. 

However, India’s future export growth may depend on ongoing policy negotiations—such as the India-US bilateral trade agreement—and its ability to navigate the evolving tariff landscape and global supply chain shifts.

Based On A PTI Report