The product categories that may see an upsurge in diversion of imports from the US to India include consumer goods, electronics, chemicals and steel.
The government has set up an inter-ministerial group to monitor a possible surge in imports from countries like China, Vietnam and Thailand, fearing a surge in inbound shipments following the imposition of high reciprocal tariffs by the US on these countries, sources said.
The product categories that may see an upsurge in diversion of imports from the US to India include consumer goods, electronics, chemicals and steel.
The clear signals for these rises in imports are likely to manifest from June to July, they said, adding the "import monitoring group" will include officials from the departments of commerce, revenue and the Department for Promotion of Industry and Internal Trade (DPIIT).
The concerned line ministries and industry associations have also been asked to provide inputs on the surge in imports and its impact on the domestic industry.
"The idea is to observe these imports and see if any measures need to be taken. It will look at all the data points closely, including shipments coming from air and sea routes. While intense watch is required, volatility in imports is normal," the sources added.
As sweeping tariffs have been imposed on India's competitors including China, Thailand, Vietnam and Malaysia, their goods become expensive in the US market and this would lead to diversion of goods into countries like India after some months.
While the US has imposed an additional 26 per cent import duty on India, its competitor Vietnam is facing 46 per cent tariff, China 34 per cent, and Indonesia 32 per cent, and Thailand 36 per cent.
However, they added that this situation also provides an opportunity to the domestic industry to procure intermediate goods at affordable rates.
One of the sources said that the government is also stepping up efforts to help exporters explore new markets.
The commerce ministry is fast-tracking formulation of its export promotion mission to support exporters in areas such as providing credit at affordable rates; and negotiations of proposed free trade agreements with the European Union, Oman, New Zealand and the UK.
Additionally, concerned officials have been directed to hold a series of bilateral meetings with the identified 20 countries such as Australia, Brazil, China, and France for pushing India's exports.
These developments come at a time when exporters and industries have raised concerns that the additional 26 per cent import duty imposed by the US on India may hurt them.
The identified 20 countries are Australia, Brazil, Bangladesh, China, France, Germany, Indonesia, Italy, Japan, the Netherlands, Russia, Singapore, South Africa, Saudi Arabia, South Korea, Turkiye, the UAE, the UK, the US and Vietnam. Huge opportunities are there in these nations for Indian exporters.
The government is framing schemes for MSME exporters to provide credit at easy terms, promote alternate financing instruments through strengthening factoring services for them, and offer assistance to deal with non-tariff measures imposed by other countries. The commerce, MSME and finance ministries are working on these schemes, which are being formulated under the export promotion mission, announced in the Union Budget for 2025-26.
The government on February 1 announced the setting up of an Export Promotion Mission with an outlay of Rs 2,250 crore to promote the country's outbound shipments.
Further concerns have been raised by the industry that countries like China may divert their surplus exports to India as Beijing is facing 54 per cent tariffs in the US.
The commerce ministry's arm Directorate General of Trade Remedies (DGTR) is the main body to deal with dumping of goods and sudden surge in imports. It investigates cases and suggests imposition of anti-dumping or safeguard or countervailing duties.
In 2023-24, the US was the largest trading partner of India with USD 119.71 billion bilateral trade in goods (USD 77.51 billion worth of exports, USD 42.19 billion of imports and USD 35.31 billion trade surplus). China was the second largest trading partner with USD 118.39 billion two-way commerce (USD 16.65 billion exports and USD 101.73 billion imports and USD 85 billion trade deficit).
The US accounts for about 18 per cent of India's total goods exports and 6.22 per cent in imports and 10.73 per cent in bilateral trade. On the other hand China's share is just about 4 per cent in exports and a staggering 15 per cent in imports.