Chinese Firms Blocked from US Exports by Trump Tariffs Seek 'India Detour'

"US Companies with Factories in China Also Reach Out to Indian Firms"

Bloomberg News reported on the 27th (local time) that Chinese companies, hit by the "tariff bomb" imposed by the Donald Trump administration in the United States, are reaching out to Indian firms in an effort to secure new sales channels.

On the 23rd (local time), a visitor is selecting products at the 137th China Import and Export Fair (Canton Fair) held in Guangzhou, China. Photo by Xinhua News Agency

Ajay Sahai, Secretary General of the Federation of Indian Export Organizations, stated that several Indian companies attending the China Import and Export Fair (Canton Fair) held in Guangzhou, China, were approached by Chinese firms.

Sahai explained that Chinese companies are seeking to supply products to their American clients through Indian firms, with Indian companies receiving a commission from the Chinese companies in return for their sales efforts.

The United States is currently imposing a 145% tariff on most Chinese imports, while Indian goods are subject to a 10% tariff. The reciprocal tariff rate on Indian products is set to rise to 26% after a 90-day grace period expires.

During President Trump's first term, Chinese companies targeted by the trade war sought to circumvent tariffs by expanding into Southeast Asian countries. However, the second Trump administration has imposed a high tariff rate of 46% on Vietnamese goods, significantly impacting rerouted exports through Southeast Asia as well.

Unlike Southeast Asian countries, India restricts Chinese investment, making it difficult for Chinese companies to establish subsidiaries in India or to export goods to the United States via India.

Sahai added, "Indian companies participating in this Canton Fair received proposals from Chinese firms to supply products to American companies under either the Chinese company’s brand or a joint brand with the Indian firm." He continued, "Such proposals have been made in sectors like hand tools, electronics, and household goods, and some American clients have even expressed a desire to negotiate directly with Indian companies."

An official from Victor Forgings, a hand tool manufacturer headquartered in Jalandhar, northern India, stated, "We have received requests from Chinese suppliers to fulfill orders on behalf of their American clients, as well as proposals from American companies that have factories in China but are struggling to export due to high tariffs."