The world’s two largest economies have declared ceasefire on a tariff war — at least for now. Washington and Beijing have agreed to a pause in their bitter trade dispute, slashing steep tariffs that had distorted global commerce and fueled geopolitical friction. From a global perspective, it is a win for diplomacy, but for India, the implications are more complex and urgent.
This is not just a détente between superpowers. It is a rewiring of global trade dynamics. And for Indian exporters who had capitalised on the disruption, the clock just started ticking again — only this time, the wind is no longer at their back.
Indian exporters had gained ground in recent years as trade friction between Washington and Beijing pushed US buyers toward alternatives. Sectors like textiles, leather, pharmaceuticals, and engineering briefly thrived. But with US tariffs on Chinese goods slashed to 30 per cent, and Chinese duties on American imports down to 10 per cent, that window is closing fast.
China’s price edge — powered by scale, subsidies, and seamless supply chains — is back in play. Indian exporters, hampered by rising input costs and sluggish logistics, are struggling to compete. As FIEO warns, the Chinese comeback “will be swift and intense.”
Many Indian firms failed to capitalise on the breathing space. In electronics, imports from China still dominate. In garments, productivity gaps remain. As one exporter put it: “We had our chance to modernise, and we missed it.”
Yet all is not lost. The global rethink on supply chains, driven by the pandemic and geopolitics, continues. India remains a strong “China plus one” candidate, with scale, a growing consumer base, and political stability on its side. Firms like Apple and Foxconn are expanding here, aided by PLI incentives and strategic neutrality that contrasts with China’s rising scrutiny.
The US-China tariff pause is not a setback for India — but it is a wake-up call. It reminds us that global trade is a game of endurance, not windfalls. India must stop waiting for someone else’s conflict to create opportunity and instead focus on earning its place as a manufacturing and innovation hub.
That means investing in automation and R&D. It means scaling up logistics and integrating MSMEs into global supply chains. It means moving away from cost arbitrage and towards trust-based, value-added trade.
India must now move ahead with confidence because it has what the world needs.