China’s exports plunge amid US Tariffs, Can India Step in to fill gap?

Suffering under the pressure of 45% US tariffs, Chinese exports have suffered the worst downturn since February, when Donald Trump imposed fresh tariffs, declaring a trade war with the world's second biggest economy. In a stark reminder of the manufacturing juggernaut's reliance on the US consumers, Chinese exports unexpectedly fell in October. According to Reuters, the outbound shipments from the world’s second-largest economy shrank 1.1% last month. It recorded the worst performance since February, reversing from an 8.3% rise in September and missing a forecast for 3.0% growth. 

China exports October 2025

Chinese exports to the U.S. fell 25.17% year-on-year. However, those of the European Union and Southeast Asian economies grew marginally, by just 0.9% and 8.9%, respectively. Economists believe the loss of the U.S. market has cut export growth by around 2 percentage points, or roughly 0.3% of GDP. Despite the massive downturn, no other country comes close to matching China's annual exports of more than $400 billion in goods to the U.S., a loss economists estimate has cut China's export growth by around 2 percentage points, or roughly 0.3% of GDP.

India export opportunity

How will it impact India? Can India exploit the crisis and replace China, at least partially? Though India itself is under the heavy burden of 50% US tariffs, it can take advantage and sell some of its products, which were earlier supplied by China. The other point is how New Delhi tweaks its export policy to fill the gap left by Beijing. 

US tariffs on China

Analysts believe China has already reached the plateau; it cannot sell more goods to the US, as it has already pushed enough. Talking to Reuters, Alicia Garcia-Herrero, chief economist for the Asia-Pacific at Natixis, said, "I think the PMI was already warning us that Chinese exports cannot continue to grow forever, and it's not only because of the U.S. but because the global economy is slowing." He added, "Exports through Vietnam to the U.S. will decelerate once the front-loading is over, and we're there. So I think it's going to be much tougher for China in the fourth quarter, which means it's going to be tougher in the first half of 2026 as well."