Indian Small-Item Producers Can Get A Toehold In US, With Some Handholding

A steep US import tariff on Chinese goods has opened a rare, short-term export window for India’s small manufacturers. Everyday consumer items that were once cheaply sourced from China will now cost significantly more in American stores. This gives Indian small- and medium-sized firms a real chance to step in—much like the opportunity Indian e-commerce firms received with changes to the US “de minimis” rule.

In 2024, the US imported over $148 billion worth of such products, with China alone supplying $105.9 billion—nearly 72% of the total. India’s share was just $4.3 billion, or 2.9%. With Chinese goods now sharply more expensive, a large gap has opened in the US market.

Indian producers already make many of these goods—from locks to lamps to plastic-ware—but mostly at a small scale. With the right push from the government on export incentives, product certifications, and financing, these firms could expand quickly and tap into this $100 billion opportunity. But the window is narrow—and may not stay open for long.

Key Products
Several product categories stand out where India’s small firms can rapidly grow and capture market share lost by Chinese suppliers—with the right planning and government support.

Fireworks: The US imports $581 million worth of fireworks annually, with China accounting for 96.7%. Indian exports, in comparison, are only $0.24 million. With current US retail prices ranging from $15 to $60, the new tariffs would raise prices to $33.75–$135. This opens a significant opportunity for India's Sivakasi cluster in Tamil Nadu—a global fireworks hub—which could scale up quickly with help in meeting US safety and compliance norms.

Plastic tableware and kitchenware: The US imports $4.97 billion worth annually, 80% of which comes from China. India’s share is just 0.49%, or $171.65 million. With retail prices expected to rise from $1.25–$16 to $2.81–$36 post-tariff, clusters in Dadra & Nagar Haveli, Daman, and Gujarat—already major producers—can step in, provided logistics and incentives align.

Other plastic products: India’s potential extends to plastic household and sanitary items. While exports remain modest, manufacturers in Haryana’s Bahadurgarh and Maharashtra’s Nashik and Bhiwandi have the capacity to scale. With rising US prices, India could emerge as a viable supplier by improving packaging, safety standards, and market linkages.

Locks: The US imports $1.2 billion worth annually, 66.3% from China. India contributes just $30.7 million (2.57%). As tariffs push prices from $10–$50 to $22.50–$112.50, manufacturers in Aligarh, Uttar Pradesh—renowned for both traditional and smart locks—can ramp up production to meet US demand.

Hand tools: This is a $1.14 billion US market. China holds a 52.9% share, while India already contributes 17.7% ($202 million). Retail prices are expected to rise from $10–$50 to $22.50–$112.50. Punjab’s Ludhiana and Jalandhar clusters, known for hand tools and agricultural implements, are well-positioned to grow further.

Nails, tacks, and pins: The US imports $1.1 billion worth, 61.3% from China. India exports just $30 million (2.7%). With prices jumping from $2–$10 to $4.50–$22.50, clusters in Howrah (West Bengal), Pune, and Ludhiana could rapidly scale to fill the gap.

Electric appliances: In categories like electric hair clippers, the US imports $924 million annually—82.8% from China. India’s share is just 0.83% ($7.7 million). As prices rise from $14–$50 to $31.50–$112.50, electronics hubs in Noida, Bhiwadi, and Baddi could expand with minimal investment in technology and testing.

Lighting: The US imports $775 million in electric lamps and fittings, with 74.2% from China. India’s share is $67 million (8.6%). Prices are expected to climb from $75–$400 to $168.75–$900. LED hubs in Morbi (Gujarat), Pune, Noida, and Bengaluru can be activated quickly to serve this market.

Hair dryers: With annual US imports of $743 million—87.1% from China—India’s current contribution is just $1.35 million (0.18%). Prices could jump from $15–$60 to $33.75–$135. Firms in Baddi, Haridwar, and Rudrapur could shift towards export-focused production with modest tweaks.

Electric space heaters: Representing a $1.065 billion US import market (90.5% from China), India currently exports only $9.36 million (0.88%). As prices rise, appliance clusters in Noida and Pune could increase output with improved safety and design standards.

Electric shavers: Even with minimal Indian presence, there is room to grow. As prices increase from $11–$65 to $24.75–$146.25, clusters in Greater Noida, Manesar, and Pune could consider this as a new export category.

Vacuum cleaners: Prices are projected to rise from $45–$282 to $101.25–$634.50. While a more complex product, Indian firms like Bajaj and Usha could enter this segment through OEM or contract manufacturing for global brands.

Water heaters: Immersion rods and geysers, already made in India for domestic and African markets, are another promising area. In the US, prices may jump from $600–$2,500 to $1,350–$5,625. Indian clusters in Baddi, Rudrapur, and Neemrana—home to Racold and Havells—are well-equipped to tap into this surge.

Electric fans: US prices are expected to increase from $20–$100 to $45–$225. India is already a major global exporter of fans. Clusters in Hyderabad, Kolkata, and Faridabad—home to brands like Crompton, Usha, and Orient—can scale production to meet US demand.

Way Forward 
India’s small-scale industrial ecosystem must develop greater depth, scale, and capability to seize this rare opportunity. To capitalize on this export window, swift and strategic action is essential.

First, export support needs to be increased. Raising RoDTEP (Remission of Duties and Taxes on Exported Products) and duty drawback rates for identified products can make Indian goods more competitive globally.

Second, technology upgrades must be prioritized. The DPIIT and the Ministry of MSME should actively support cluster-level modernization initiatives so that small firms can meet US quality and compliance standards.

Third, export credit access must be improved. The reintroduction of the interest equalization scheme for small firms could ease working capital constraints and encourage production ramp-up.

Finally, regulatory compliance should be made easier. The government should launch an empowered online facilitation cell to guide

MSMEs through the procedures, documentation, and certifications required to access the US market.

India has a fleeting but valuable opportunity to step into the space being vacated by Chinese manufacturers due to reciprocal tariffs. Whether it can seize the moment depends on how quickly and decisively it acts.