Sourcing Beyond China: Why India Should be your Next Sourcing Destination for e-Commerce

TL;DR

• U.S.-China trade tensions and increased tariffs are pushing e-commerce sellers to explore alternative sourcing options.

• India offers a stable, cost-effective choice with just 26% tariffs, strong U.S. trade ties, and growing manufacturing strength.

• Sellers gain access to a wide range of products, low labor costs, and flexible production scales in India.

• Early movers can lock in better prices, secure priority with suppliers, and strengthen long-term supply chain resilience.

• India’s booming domestic market creates added opportunities for e-commerce sellers to expand sales beyond sourcing.

If you’re an e-commerce seller struggling with rising costs and supply chain troubles, you’re facing challenges many businesses are dealing with today.

In 2025, new U.S. tariffs have shaken global trade, hitting Chinese imports with a massive 145% tariff. As a result, many businesses that once depended on China are now searching for better, more affordable alternatives. This is where India stands out.

While China’s exports to the U.S. have already fallen from $505 billion in 2018 to $439 billion in 2024, India is offering a smart alternative. With just a 26% tariff on goods sent to the U.S., India gives businesses a much cheaper and more stable way to source products.

On top of that, India has kept a friendly trade relationship with the U.S., unlike China, which has imposed tough counter-tariffs. With its fast-growing manufacturing sector, improving business environment, and strong government support, India isn’t just another option, it's a smart, future-ready sourcing choice for the US seller.

Why look beyond China for sourcing?

For years, China has been the world’s factory, dominating global sourcing with its vast manufacturing capacity, low labor costs, and well-developed supply chain networks. But the landscape has shifted dramatically in recent years, and e-commerce sellers can no longer afford to ignore the risks.

The ongoing U.S.-China trade war has caused major disruptions. In early 2025, the U.S. imposed a staggering 145% tariff on Chinese imports, raising costs sharply for businesses that rely on China-based suppliers.

This comes on top of years of rising wages in China, stricter environmental regulations, and political tensions that have made long-term planning increasingly difficult.

At the same time, many global brands are seeking to diversify their supply chains to avoid being overly dependent on a single country. COVID-19 exposed how vulnerable China-centric sourcing strategies can be when unexpected disruptions hit.

Add in China’s own retaliatory tariffs and unpredictable regulatory shifts, and it’s no surprise that businesses are looking elsewhere. Beyond cost, sellers are now thinking about flexibility, resilience, and sustainability.

Emerging markets like India, Vietnam, and Mexico are stepping up, offering competitive manufacturing capabilities and improved trade relationships. India, in particular, has strengthened its position as a sourcing hub thanks to its stable U.S. trade ties, 26% average tariff rates (far below China’s), and government-backed manufacturing initiatives like “Make in India.”

In short, looking beyond China isn’t just about saving money, it’s about building a smarter, more adaptable supply chain that’s ready for today’s global challenges.

Why is India the most reliable sourcing destination for online sellers? 

#1 Strong U.S.-India trade relations with lower tariffs

The trade ties between India and the United States have been steadily strengthening year after year, setting a strong base for future business growth. In 2024, the total trade between the two nations reached an impressive $191 billion. 

Today, the U.S. is India’s largest trading partner, making up nearly 17% of all Indian exports, a clear sign of their growing partnership. Here’s a simple snapshot of how trade has grown over recent years:

(Source: Ministry of Commerce)

• In 2019, India exported $54 billion to the U.S. and imported $35 billion, totaling $89 billion in trade.

• By 2022, this rose to $76 billion in exports and $48 billion in imports, reaching $124 billion total.

• In 2024, exports climbed to $98 billion, imports hit $83 billion, and total trade jumped to $191 billion. (Source: Ministry of Commerce)

This strong upward trend shows how closely the two countries’ economies are connected, especially now, as many American companies look for reliable, cost-effective sourcing options outside China. India is well-positioned to meet this growing demand and become a key sourcing partner for U.S. businesses.

#2 Diverse manufacturing base

India has become one of the most reliable e-commerce sourcing destinations for online sellers thanks to its incredibly diverse manufacturing base. From textiles, handicrafts, and leather goods to pharmaceuticals, automotive parts, electronics, and machinery, India offers suppliers across almost every major category.

Recent global shifts, including the U.S.-China trade tensions and rising Chinese production costs, have pushed many businesses to explore alternative sourcing markets, and India stands out. In 2024, India’s manufacturing sector saw over 6% annual growth, fueled by strong government support under initiatives like “Make in India” and increasing foreign investment. 

Unlike some countries limited to niche products, India gives online sellers access to both mass-produced goods and unique, handcrafted items, offering flexibility, variety, and competitive pricing all in one place.

#3 Low labor and production costs

India has become one of the most vital alternative sourcing destinations for online sellers, largely because of its low labor and production costs. Compared to China and other manufacturing hubs, India offers highly competitive wages and affordable manufacturing, which helps sellers to save money without compromising on quality.

As labor costs in China continue to rise, India’s workforce, especially in textiles, apparel, handicrafts, and small-scale industries, remains one of the most cost-effective in the world. This cost advantage allows online sellers to price their products better, improve profit margins, and stay competitive in global markets.

With rising global tariffs and shifting supply chains, many U.S. and European sellers are now turning to India as a fresh, reliable, and economically smart sourcing partner.

#4 Ease of doing business

India has made huge progress in making it easier for businesses to set up and operate. Over the past few years, the country has improved its “Ease of Doing Business” ranking. As per the latest data, India holds the 63rd spot out of 190 countries. This means you can partner with Indian suppliers or set up sourcing operations with less hassle and faster timelines.

The government’s digital push has also helped many approvals and processes are now online, making them more transparent and easier to track. Compared to neighboring countries, India offers a smoother, more business-friendly environment, making it a smart choice for global sourcing today.

#5 Strong export infrastructure and digital tools

India has been investing heavily in improving its export infrastructure and digital systems, making it a reliable sourcing destination for online sellers worldwide. Major ports like Mumbai, Chennai, and Mundra now handle large export volumes efficiently, while improved road and rail networks connect inland factories to these ports faster than before.

On the digital side, India’s customs and logistics systems have become smoother thanks to platforms like ICEGATE (Indian Customs EDI Gateway), which simplifies paperwork and speeds up clearance. E-commerce sellers also benefit from improved tracking, digital invoicing, and faster payment systems. Combined, these upgrades make it easier, quicker, and more predictable to source products from India.

#6 Flexible production scale

India’s flexible production scale makes it one of the most reliable sourcing destinations for online sellers today. Whether you need small, custom batches or large, mass-produced orders, Indian manufacturers can handle both with ease. 

Many factories are set up to work with small businesses and startups, offering low minimum order quantities (MOQs) , something often hard to find in China. On the other end, India’s large industrial base supports big international brands with bulk production. This flexibility allows e-commerce sellers to scale up or down based on demand without heavy upfront investment, making sourcing from India both practical and cost-efficient.

#7 Access to unique and specialty goods

One reason India sourcing is beneficial for e-commerce sellers is its access to unique and specialty goods that are hard to find elsewhere. From handcrafted textiles, artisan jewelry, and eco-friendly homewares to organic foods and natural wellness products, India offers products with rich cultural value and distinct appeal. 

Global buyers are increasingly looking for items that stand out, and Indian suppliers can meet this demand with small-batch, custom, or handmade goods. With platforms like Amazon, Shopify expanding their international reach,  sellers are now better connected to global markets, making sourcing from India more attractive than ever.

#8 Government-backed initiatives like Make in India

India has become one of the most reliable sourcing destinations for online sellers, due to government-backed programs like Make in India. Launched in 2014, this initiative boosts local manufacturing and attracts foreign investment, turning India into a global production hub. Recent data shows India’s manufacturing sector grew over 8% in early 2025, especially in textiles, electronics, and auto components.

Key schemes supporting this include the “Production Linked Incentive (PLI) Scheme”, which rewards manufacturers for meeting production targets, and Startup India, which encourages innovation and small-scale manufacturing in India. With simpler business rules, better export infrastructure, and competitive labor, India offers sellers a smart, future-ready sourcing base.

Why does it matter for e-commerce sellers? 

1. Gain early access and better pricing

When supply chains start shifting, suppliers in India have more capacity, flexibility, and are open to offering better deals. U.S. importers who act early can secure lower prices, priority production slots, and long-term agreements. 

As more companies turn to India to reduce reliance on China, competition will grow, lead times may get longer, and supplier choices will narrow. By moving now, businesses can lock in key advantages before the market becomes crowded and costs begin to rise.

2. Strengthen your supply chain resilience

Global disruptions such as pandemics, political tensions, and sanctions are no longer rare; they’re happening more often. For e-commerce sellers, building resilience matters just as much as saving costs. 

Sourcing from India now helps businesses spread their risks, avoid over-reliance on one country, and stay steady even if future trade issues arise. Companies that plan and adapt their supply chains early will handle uncertainty much better than those that wait and scramble to react later.

3. Reduce cost risks

For e-commerce sellers, reducing cost risks is key to staying profitable and competitive. By sourcing from India, businesses can access affordable labor, raw materials, and production without the heavy tariffs now hitting Chinese imports. 

This helps protect profit margins and avoids sudden price increases caused by global tensions or supply chain disruptions. Planning and working with reliable Indian suppliers allows sellers to lock in stable costs and avoid the financial stress of rising or unpredictable expenses.

4. Tap into India’s expanding domestic market

India’s domestic market is one of the fastest-growing in the world, with a population of over 1.4 billion and a rising middle class eager to spend. For e-commerce sellers, tapping into this expanding market means more than just sourcing products; it opens doors to new customers and local sales opportunities. 

By partnering with Indian suppliers, sellers can better understand local trends, customize products for Indian buyers, and position themselves ahead of competitors. It’s a smart move for businesses looking for long-term growth and global reach.

We are also sellers ourselves and very well understand the current situation of tariff changes, shifting global sourcing trends, and the urgent need for sellers to adapt quickly to stay competitive in a saturated marketplace.

How to get started with sourcing from India

If you are already an e-commerce seller and now want to shift your sourcing to India, here’s a simple step-by-step guide to help you:

• Decide what you want from India — Look at your current products and decide which ones you want to start sourcing from Indian suppliers. Think about quality, price, and variety.

• Search for Indian suppliers — Use platforms like IndiaMART, TradeIndia, or Alibaba to find trusted suppliers. You can also join trade shows or ask for business contacts. Always check their reviews, certifications, and past work.

• Request product samples — Before you make any big order, ask for samples. This helps you check product quality and see if it fits your needs.

• Discuss prices and delivery terms — Talk with the supplier about pricing, delivery times, minimum order quantity, and payment terms. Make sure you understand all costs, including shipping and taxes.

• Plan your shipping — Choose between air (faster, more expensive) or sea (slower, cheaper) shipping. Work with a shipping agent or freight forwarder who understands Indian exports.

• Build a strong supplier relationship — Keep good communication, be clear about your needs, and pay on time. A strong relationship helps you get better service and deals.

Moreover, sourcing the product isn’t enough for your business to grow, you also need proper Amazon seller account management to optimize listings, handle inventory, run ads effectively, and ensure smooth operations that drive consistent sales and profits.

Is India your next smart sourcing move?

In today’s shifting global market, sourcing from India offers e-commerce sellers a smart, future-ready alternative to China with lower tariffs, diverse products, and access to a booming local market. By moving early, businesses can secure better pricing, strengthen supply chain resilience, and reduce long-term cost risks. 

For sellers unsure where to start, working with our team of Amazon consulting experts is here to help you explore the huge sourcing opportunities India offers. We help you find trusted suppliers and improve your supply chain, all tailored to your business needs. By partnering with us, you can take full advantage of India as a smart sourcing destination and make your Amazon business stronger and more successful.