12 Mar 2025
The ongoing trade dispute between the United States and China has created a favorable environment for Indian chemical manufacturers, according to a report by Prabhudas Lilladher. The U.S. has imposed an additional 10% tariff on Chinese imports, prompting American companies to seek alternative suppliers, potentially benefiting Indian exporters.
The ongoing trade dispute between the United States and China has created a favorable environment for Indian chemical manufacturers, according to a report by Prabhudas Lilladher. The U.S. has imposed an additional 10% tariff on Chinese imports, prompting American companies to seek alternative suppliers, potentially benefiting Indian exporters.
U.S. Market: A Prime Destination for Indian Chemicals
The United States stands as the largest importer of Indian chemicals, accounting for 14% of India's total chemical exports. In the fiscal year 2022-23, India's chemical exports to the U.S. amounted to $3.85 billion, encompassing products such as dyes, agrochemicals, and various inorganic and organic chemicals.
Historical Context and Future Prospects
Reflecting on the 2018 U.S.-China trade war, India experienced a surge in exports to the U.S., increasing from $57 billion to $73 billion as American firms diversified their sourcing. A similar trend is anticipated now, with U.S. companies likely to turn to Indian suppliers in light of the new tariffs on Chinese goods.
Potential Challenges: Market Saturation and Price Pressures
However, the report cautions that Chinese manufacturers may redirect their exports to other markets, potentially leading to an influx of cheaper Chinese chemical products globally. This scenario could intensify competition and exert downward pressure on prices in markets where Indian companies operate.
Indian Companies with Significant U.S. Exposure
Several Indian chemical firms have substantial exposure to the U.S. market:
Company | Export Share to USA |
Vinati Organics | 39% |
Navin Fluorine | 35% |
Gujarat Fluorochemicals | 30% |
Laxmi Organic | 29% |
Aarti Industries | 24% |
Fine Organic | 17% |
Deepak Nitrite | 14% |
SRF | 11% |
Jubilant Ingrevia | 10% |
Source: Industry, PL
Vinati Organics primarily exports ATBS, while Navin Fluorine supplies HFO and CDMO products, both facing minimal competition from Chinese counterparts. Aarti Industries exports mainly MMA and other products to the U.S.
Conclusion
The U.S.-China trade tensions present both opportunities and challenges for Indian chemical companies. While there is potential for increased exports to the U.S. due to the tariffs on Chinese goods, companies must remain vigilant about potential market saturation and price competition resulting from diverted Chinese exports.
The detailed article published by www.indianchemicalnews.com can be accessed from https://www.indianchemicalnews.com/policy/indian-chemical-companies-to-benefit-from-us-china-trade-war-prabhudas-lilladher-25422
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