In April 2025, President Donald Trump implemented a series of tariffs aimed at addressing what he described as unfair trade practices and a significant trade deficit with various countries. These tariffs, part of a broader “Liberation Day” policy, have sent ripples through global trade. Among the most notable impacts was the significant 145% tariff imposed on China, a move that is reshaping the global industry. As the U.S. looks to diversify supply chain, India is emerging as a key player in the Indian export business. This article delves into the opportunities presented by these tariffs, the requirements to start export business from India, the legal and financial costs involved, and the prospects of Indian industry in 2025.
Understanding the Impact of U.S. Tariffs on Indian Industry
Countries Affected by Trump’s Tariffs
President Trump’s tariffs applied to a wide range of trading partners, with varying rates based on trade balances and perceived unfair practices. Some of the major countries affected by the tariffs include:
| Country | Tariff Rate (%) | Key Sectors Affected |
|---|---|---|
| China | Up to 125% | Electronics, machinery, textiles, steel, solar panels |
| Vietnam | 46% | Textiles, electronics, furniture |
| Bangladesh | 37% | Textiles, garments |
| Indonesia | 32% | Textiles, footwear, electronics |
| India | 27% | Pharmaceuticals, textiles, auto parts, chemicals |
Opportunities for India Amidst Global Tariff Shifts
The imposition of high tariffs on countries like China and Vietnam has created gaps in the U.S. market. India can leverage this situation in the following sectors:
- Textiles & Apparel: With high tariffs on Chinese and Vietnamese textiles, U.S. buyers are seeking alternative suppliers. India, with its vast textile industry, can fill this void.
- Pharmaceuticals: India’s robust pharmaceutical sector can cater to the U.S. demand for generic drugs, especially as tariffs make Chinese alternatives more expensive.
- Auto Components: As tariffs impact South Korean and Japanese auto parts, India can position itself as a cost-effective supplier.
- Chemicals: India can expand its chemical exports to the U.S., capitalizing on the reduced competitiveness of Chinese products due to tariffs.
- Electronics Assembly: The “China+1” strategy adopted by many companies to diversify their supply chains presents India with opportunities to attract electronics manufacturing and assembly operations.
Strategic Steps for Indian Exporters
To capitalize on these opportunities and start export business from India, Indian exporters should consider:
- Enhancing Quality Standards: Meeting international quality benchmarks to appeal to U.S. buyers.
- Leveraging Government Schemes: Utilizing initiatives like the Production Linked Incentive (PLI) scheme to boost manufacturing capabilities.
- Exploring Joint Ventures: Collaborating with foreign firms seeking to relocate operations from high-tariff countries.
- Investing in Technology: Adopting advanced manufacturing technologies to improve efficiency and reduce costs.
Products Targeted by the Tariffs
The tariffs apply to a wide range of products, with the following categories particularly affected:
- Electronics: This includes semiconductors and consumer electronics, which are major imports from many of the affected countries.
- Pharmaceuticals: Medicines and medical devices were also impacted by the tariffs.
- Automobiles and Parts: Many countries that export vehicles and automotive components, including China and South Korea, were significantly affected.
- Steel and Aluminium: These materials are crucial in manufacturing and construction and were part of the tariff list.
- Consumer Goods, Including Toys: Toys, especially those imported from China and Vietnam, were among the most impacted by these tariffs.
The impact of U.S. tariffs on Indian manufacturers, particularly in the toy industry, has created a unique opportunity for India to emerge as a global leader in toy production and export. With the Indian export business poised to take advantage of the shifting global trade dynamics, India stands to benefit significantly from the increasing demand for alternatives to Chinese toys.
India: The New Toy Export Hub
With the U.S. tariffs on Chinese toys, India is positioning itself as a key alternative for toy manufacturing. The Indian government has been proactive in promoting the country’s toy industry through initiatives like the National Action Plan for Toys, which focuses on improving toy quality and reducing the reliance on imports.
How to Start Export Business from India
If you are looking to start export business from India, here are the key steps and requirements you need to consider:
1. Register with the Directorate General of Foreign Trade (DGFT)
To start export business from India, you need to obtain an Import Export Code (IEC) from the DGFT. This is a mandatory requirement for all exporters in India, and the process involves filling out an application and submitting necessary documents.
2. GST Registration
If your turnover exceeds ₹40 lakhs (₹20 lakhs for special category states), you will need to register for Goods and Services Tax (GST). GST is a tax levied on the sale of goods and services in India, and it is mandatory for any business involved in the export of goods.
3. Export Documentation
The following documents are essential for exporting toys from India:
- Packing List: A detailed list of the items in the shipment.
- Commercial Invoice: A document providing details of the sale transaction.
- Bill of Lading/Airway Bill: A contract of carriage between the shipper and the carrier.
- Certificate of Origin: Certifies that the toys are manufactured in India.
- Export Declaration Form: A declaration required by customs to declare the export transaction.
4. Customs Clearance
You will need to work with a Customs Clearing Agent to ensure that your products pass through customs smoothly and comply with all regulations. This process includes paying customs duties and ensuring that your shipment meets all documentation requirements.
5. Export-Import Bank (EXIM) Financing
Establishing a relationship with an Export-Import Bank in India can help you manage payments and provide financing for your export business. EXIM banks offer working capital and foreign exchange support, making it easier to handle international transactions.
6. Foreign Exchange Management Act (FEMA) Compliance
Under FEMA regulations, you must comply with guidelines for receiving payments in foreign currency and handling foreign transactions.
7. Logistics and Shipping
To ship your toys to international markets, you will need to choose a reliable shipping provider. Depending on the size of your shipment and the destination, you will need to decide whether air freight or sea freight is more cost-effective.
Cost Considerations for Export Business
GST Registration
While GST registration is free, you may need to spend annually for accounting and filing services.
IEC (Import Export Code)
The fee for IEC registration is typically between ₹500 and ₹1,000.
Certification Costs
- BIS Certification
- CE or ASTM Certification
Customs Clearance Costs
Hiring a Customs Clearing Agent
Shipping and Freight Costs
Shipping costs vary depending on the size and weight of the shipment and the destination:
- Sea Freight
- Air Freight
Legal and Consultation Fees
You may need legal consultations for export-related matters.
Export Insurance
Marine insurance for cargo protection typically costs 0.5% to 1% of the value of the goods being exported.
Ease To Compliance: Your Export Partner
Starting an export business can seem daunting, but with the right guidance and support, it’s absolutely achievable. Our company, Ease To Compliance, offers end-to-end services to help you start export business from India. From IEC registration and GST compliance to customs clearance, documentation, and logistics support, we ensure a smooth and compliant journey into international trade.
Whether you’re focusing on the toy industry or other emerging export sectors, Ease To Compliance is your reliable partner in navigating the complexities of global trade and ensuring your success in the competitive export market.
FAQs on How To Get Benefits From “Trump Tariffs” For Indian Industry
1. Do I need a company to start exporting from India?
Answer: No, individuals can export too, but having a registered business builds credibility and simplifies compliance.
2. How long does it take to get an Import Export Code (IEC)?
Answer: Usually within 1–3 working days after successful application and document submission.
3. Can I export toys without BIS certification?
Answer: No, BIS certification is mandatory for exporting toys from India as per government regulations.
