The escalation, marked by Beijing’s abrupt imposition of new export controls on rare earth elements—prompting what Trump condemned as a “very, very bad” move—has sharply tilted the balance of global manufacturing diplomacy.
India’s business circles sense a strategic opening as trade talks with the US gain momentum amidst positive signals from both Prime Minister Modi and President Trump, boosting hopes of a near-term breakthrough in bilateral trade, even as China-US trade tensions have ignited again.
With China under pressure, industry leaders believe India could emerge as a vital alternative.
Beijing announced new port fees on American ships and expanded export restrictions on lithium-ion batteries, along with rare earths and related technologies.
The threat of US tariffs ballooning to 140 per cent on Chinese goods now has cast a long shadow over international trade corridors, even as voices from India’s business ecosystem hum with a resonant tone of strategic anticipation.
A senior apparel industry leader, interacting with Fibre2Fashion, remarked with calculated optimism that “India has been giving positive statements about bilateral talks progressing well with the USA,” emphasising further a key strategic insight—that the United States, for all its economic might, will find it difficult to alienate or discount both China and India simultaneously.
The twin giants of Asia, each a formidable manufacturing powerhouse, represent not only critical links in the global supply chain but also deeply entwined partners in America’s complex economic architecture.
Meanwhile, as per reports, China’s exports to the United States have slumped 27 per cent in September compared with a year earlier, even though its overall global shipments recorded the strongest growth in six months.
Exports to the United States have now declined for six consecutive months, following a 33 per cent drop in August, as trade tensions between Beijing and Washington intensified, according to media reports.
Although the US and China appeared to be maintaining a delicate ceasefire since the Madrid trade talks in September, hopes of stability have been frayed by Beijing’s recent actions, and the anticipated meeting between the Chinese and US Presidents in South Korea now hangs in uncertainty, its prospects dimmed by acrimony.
In contrast, the US–India dialogue has gathered momentum lately, buoyed by a series of high-level exchanges.
According to media reports, India and the United States are scheduled to hold another round of trade talks this week, with New Delhi reportedly considering increasing imports of US energy and gas in an effort to address Washington’s concerns about its ongoing purchase of Russian oil.
The talks, which were suspended briefly in August after the Trump administration announced tariff hikes of up to 50 per cent on Indian goods, resumed in September after US President Donald Trump struck a conciliatory tone in public remarks and spoke to Prime Minister Narendra Modi on the phone.
Prime Minister Narendra Modi, on his part, noted that the two leaders “reviewed good progress achieved in trade negotiations” and committed to remaining in close and frequent communication over the coming weeks.
This spirit of constructive engagement has infused stakeholders in India’s apparel manufacturing sector with renewed confidence.
The diplomatic overtures, underscored by mutual admiration between leaders, signal a convergence of economic intent. President Trump, in a characteristically emphatic post earlier on Truth Social, had affirmed, “I am pleased to announce that the United States of America and India are continuing discussions to address trade barriers between our two nations…I am confident that reaching a mutually satisfactory conclusion will be straightforward for both of our great countries.”
Mirroring this warmth and strategic clarity, Prime Minister Modi also took to ‘X’ to assert India’s commitment to a mutually beneficial outcome, stating, “India and the US are close friends and natural partners. I am confident our trade discussions will unlock the immense potential of the India-US partnership. Our teams are working diligently to conclude these talks swiftly.”
His tone, measured yet resolute, signalled India’s readiness to take centre stage in the unfolding global trade reshuffle.
Very recently, US ambassador-designate Sergio Gor also met with Prime Minister Modi and later with Commerce Secretary Rajesh Agrawal on strengthening bilateral trade and investment.
“During my visit to India, I met with Commerce Secretary Agrawal and discussed US-India economic ties, including increased investment in the United States,” Gor said on ‘X’ even as the Indian Government maintained Indian officials held “constructive” talks with US counterparts in Washington last month, adding that both sides agreed to push for an early conclusion of a mutually beneficial trade deal.
As expected, within industry circles, the sentiment is somewhat buoyant. As one apparel sector veteran mused, “The way things are proceeding, it could be India now to blunt the China impact.”
The logic is compelling. With Washington bracing for intensified conflict with Beijing, India’s role as a strategic alternative—especially in labour-intensive sectors like textiles—becomes not just viable, but vital, and the industry is abuzz with speculation that the coming festive season might herald a diplomatic coup of economic consequence.
Stakeholders see this moment not merely as fortuitous but as the culmination of months of persistent behind-the-scenes negotiations. Their expectations do not seem naïve or merely aspirational but grounded in the logic of global supply chain realignment, geopolitical recalibration, and the undeniable economic complementarity between India and the United States.
So, while the spectre of a new trade war looms large between the USA and China, for India’s textile and apparel industry, the shifting winds may yet blow favourably.
As China and the US inch closer to open economic confrontation, India’s quiet diplomacy and strategic patience, on the other hand, may pay off in dividends—potentially transforming what once seemed like collateral risk into catalytic opportunity, felt many within the industry.
Fibre2Fashion News Desk (DR)