As of 10/22/2025, US and India are nearing a trade agreement to reduce tariffs to 15-16%.
India was long expected to have favorable tariffs compared to other countries, and was unexpectedly hit with one of the highest numbers (50%) post-Liberation Day.
This deal, if it materializes, will return India as a strong player for alternatives to China and open up its manufacturing base to US businesses looking to diversify.
India and US Trade
US imports from India were up 23% YoY as of July this year, sitting at around $64,140MM according to US government data.
The large increase is likely due to diversification away from China after prohibitive tariffs were placed on the world’s largest manufacturing base.
India likely saw a decline in US exports after the imposition of 50% tariffs at the end of August, though that data is not yet available in the US International Trade Commission’s online database.
Overall, the US accounts for a relatively small amount of India’s total exports. This trade deal, if implemented, could see that shift over time if US businesses continue to view China as a high-risk sourcing location.
Product Categories to Explore in India
- Textiles
- Modular furniture
- Aluminum extrusions
- Precision CNC machining
- Kitchen disposables and restaurant supply
- Toys (3D puzzles, flash cards, cotton plushies, wooden toys)
Sourcing with First Link
Going forward, the conversation around sourcing is likely to change from “China alternatives” or “China +1” to “where is the best place to make our product?”
At First Link, we have in-house teams and strong partnerships in multiple countries to grant clients access to a wide array of sourcing capabilities. Get in touch anytime to see how we can help you explore the best option for your business.
