In a significant shift, Chinese companies are seeking the assistance of Indian exporters to maintain their access to the US market. Faced with hefty tariffs and growing restrictions, these Chinese businesses are exploring ways to bypass the US’s punitive measures by shipping goods through India, aiming to avoid losing valuable US customers.

At the ongoing Canton Fair in Guangzhou, the world’s largest trade fair, Indian exporters have been approached by Chinese manufacturers for help. Ajay Shahi, Director General of the Federation of Indian Export Organizations, confirmed that several Chinese companies have approached Indian counterparts at the fair, requesting support in exporting products to the US. In exchange, Indian firms are being asked to handle commissions on these exports.

The primary catalyst behind this shift is the US's imposition of a 145 percent tariff on Chinese goods, a move that has heavily impacted Chinese exporters. Meanwhile, goods from India to the US face only a 10 percent tariff, a significant advantage for Indian exporters. However, if US President Donald Trump reinstates the suspended tariffs, the tax on Indian exports could rise to 26 percent.

In response to earlier US tariffs, many Chinese companies relocated operations to South Asia, setting up factories in Vietnam and shipping goods through Thailand to take advantage of lower tariffs. However, the US closed this loophole in the second round of tariffs by imposing a 46 percent duty on Vietnamese goods, forcing Chinese traders to look for alternatives like India.

Despite the growing interest, Chinese companies are facing challenges due to India's stricter regulations on Chinese investments and imports. Establishing export systems in India to ship goods to the US may prove difficult. Indian companies, however, are being presented with opportunities to ship goods to US clients under Chinese brands or even co-brand products with Chinese firms.

According to Shahi, Chinese companies from various sectors—such as hand tools, electronics, and home appliances—are predominantly seeking Indian partnerships. Additionally, some US companies that had been clients of Chinese manufacturers have started direct negotiations with Indian exporters.