China has played a significant role in the global market for decades as a manufacturing hub for a diverse range of products. It has been a hot favorite among importers and bulk buyers for product sourcing. The USA has been the largest importer of Chinese goods due to reasonable cost and good supply chain management etc. However, recent developments in the global markets including the trade war between the USA and China, rising production costs in China, etc., have made US businesses think otherwise.
The economic conflict between the two countries rose higher when trade barriers were set on China in 2018 to avoid unfair trade practices. Along with other factors, the issue of tariffs becomes prominent. As per a recent report, in the USA, the tariffs on Chinese EVs were hiked from 25% to 100%, levies on solar cells were doubled from 25% to 50%, and the duty on certain steel and aluminium products was doubled from 7.5% or less to 25%. There are tariff changes for many other products that come through sourcing from China.
Given the complexities of importing products from China, US businesses are bound to look for alternatives. Due to historic craftsmanship, lower tariff rates and encouragement from the government to export products, sourcing from India has emerged as the strongest alternative to Chinese items.
This situation has created a dilemma in US business owners’ minds. Should they source from China, their most trusted import destination till now? Or should they go to India and avoid the high tariffs? The improved infrastructure in India has made Indian supply chain management equally capable.
This blog is here to clear all such doubts and dilemmas. This blog will discuss how sourcing from India differs from sourcing from China. This comparative analysis will help you make an informed decision about your suitable import destination, as a business owner in the USA.
A Background Overview of Tariff Rates for Products from India and China
In 2018, The US administration decided to renegotiate the trade arrangements between the USA and other countries. China was at the top of the list as China is the biggest exporter to the USA. Increasing the tariffs was a part of President Donald Trump’s agenda. He aimed to protect American jobs and reduce US trade deficits. This agenda still continues as we can see in the second quarter of 2024, President Joe Biden announced a tariff hike on many Chinese goods.
However, this bilateral trade war has opened another door to opportunity for US businesses. They can now clearly consider alternative import destinations. India has become a preferential sourcing destination as the governments of both countries are working closely to improve the trade.
The tariffs on a wide range of Indian products are still much lower than those on Chinese products. From apparel and fashion to wooden items and handcrafted gifts, you can purchase various products for your business at a low tariff rate. Let’s learn more about the tariff or import duty on diverse products from India vs. China.
Sourcing from India vs. China: Discussing the Tariffs on Products
A few product categories, like apparel, handcrafted goods, leather items etc., can easily be imported from India at a low tariff rate.
Wooden Products :
A trade-weighted average tariff rate of around 2% is applied to industrial goods, including wooden products, imported from India. Plywood, veneers, and particle boards typically face a range of tariffs, usually between 0% and 8%. On the other hand, wooden furniture and related items imported from China often face around 25% tariff. Anyway, the exact rates depend on the product classification. You can click here to learn more about sourcing wooden products from India.
Leather products:
Leather products imported from China to the U.S. are generally subject to a base tariff rate of around 5-10%. Also, a 7.5% tariff is added for many products under the Section 301 tariffs imposed during the U.S.-China trade war. So, the most Chinese leather goods are found at a combined tariff rate of around 12.5% to 17.5%. On the other hand, the tariff range for leather products imported from India starts from 2.5% and may go up to 20%. The exact rates depend on the specific classification of the leather products under the Harmonized Tariff Schedule (HTS).
Gems and Jewelry :
For the most gemstones imported from India, the U.S. import duty is set at 0%, meaning there is no customs duty. However, the tariff rate for jewelry items such as gold or silver pieces generally ranges from 5.5% to 11%. On the contrary, tariffs typically range from 7.5% to 25% for many goods imported from China, including gems and jewelry. Under Section 301 tariffs, many jewelry items are subject to a 25% tariff. This includes precious and non-precious metal jewelry like gold, silver, and imitation jewelry. If you need more tips on other benefits of sourcing jewelry from India, please click here.
Handcrafted home decor and gifts :
Most handcrafted goods imported from India are subject to duty rates ranging from 0% to 6.5%. On the other hand, many handcrafted home decor and gift products from China may face tariffs ranging from 0% to 25%.
This was a quick overview of the diverse tariff rates on different products from India and China in the USA. However, to get the exact rate for a specific product, it’s best to consult the HTS. Or, you can check with a professional sourcing consultant in India for all precise product classifications and their tariff rates. There are other handmade products in India which are very popular globally.
India or China? A Better Sourcing Destination for Businesses in the USA
While China adheres to its principle of imposing high import tariffs to protect its manufacturers, India assures a lower rate than that. However, foreign investors must invest within a pre-decided timeframe to avail of this lower tariff rate.
China offers the best quality products in multiple categories like electronic items, automobile parts, silk fabric etc. Its technological advantages, excellent manufacturing units etc. ensure a good customer experience and keep it at the top of the suppliers’ lists across the world.
However, China’s unfair trade practices including intellectual property theft etc., have brought concern in the US market. Also, the country exports artificially low-priced products in the global market, which disturbs the economy of the markets.
On the contrary, India has a reputation of an ethical trade partner which respects international laws and the local economy. Sourcing from India, due to the vast pool of skilled Indian artisans and a legacy of manufacturing quality products, emerges as a notable sourcing destination. Due to lower tariff rates than Chinese products, Indian goods are likely to rule over the USA markets.
Products from the Indian subcontinent have a strong potential to meet the diverse needs of the global market. Businesses in the USA can easily import products like metal gifts, leather items, handcrafted goods, jewelry, wooden products, apparel and textiles, etc., by paying much lower import duties and taxes from India.
Sourcing products from both countries, India and China can be a good business strategy for business owners, online sellers and bulk importers in the USA. Both countries have large networks of manufacturing facilities and are at par in terms of technology and supply chain management today.
How does India Sourcing Network help in sourcing products? –
India Sourcing Network is the most trusted partner for sourcing products from India and China. It assures quality products at competitive prices and on-time delivery. It aims to build strong global partnerships among manufacturers, suppliers and sellers. India Sourcing Network offers a “Done for You Sourcing Service” facility, which effectively manages the whole sourcing process in countries like India, China, Vietnam and Turkiye. With over 100 years of experience in sourcing products from Asia, the experts in India Sourcing Network ensure a hassle-free process of sourcing products.
Frequently Asked Questions on Sourcing from India vs. China –
What is the risk of sourcing from China?
Various risks exist, including intellectual property violation, which leads to legal hassles and reputation damage for businesses that import products from China. However, high-quality products for your business model are available here.
Can products from India be trusted?
India has a legacy of manufacturing diverse goods with keen attention to detail. Indian artisans barely compromise with the quality of the products. Also, amidst the recent US-China trade tariff war, India promises to provide better quality products at a lower tariff rate. So, products from India can be trusted and add profit to your business.
What is better- made in India or China?
In many categories, Chinese products are superior to similar products from any other country. On the other hand, Indian products are often known for excellent craftsmanship and creative essence. Products like handcrafted gifts, wooden home decor, etc., from India, are very popular and electronic goods, automobile parts, silk fabric etc. from China are equally popular. Hence, products from both India and China are reliable. All you have to do is choose the right sourcing partner who can understand your needs and suggest the best options to you.
Which is the best site for sourcing from India?
India Sourcing Network is a one-stop destination to find manufacturers and suppliers from India and China. With its team of experts, it ensures on-time delivery, competitive prices, and quality of products. Contact us today for a free consultation.
Final Words –
Sourcing from India is definitely a profitable business strategy for the USA importers and bulk buyers. Since early ages, India has showcased diversity in its craftsmanship. A unique aura hovers around the products manufactured in different areas in India. Along with it, most of the Indian products are environment-friendly. Thus, quality products are found in India at a lower tariff rate than China and many other countries. Moreover, with most people speaking English, India offers a smooth communication advantage to business owners in the USA.
On the other hand, China showcases an innovative mindset and often brings unique products to the global market. Their products’ quality is unmatched for many categories. Hence, products from both countries can be relied upon. Choose what meets your needs and aligns with your choices the best!