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US-China Trade War to Help India Tap Export Opportunities, Suggest Experts

The US and China are significantly raising import duties on each others' products. In international commerce parlance, trade war means increasing import duties by trading partners.


Updated:May 16, 2019, 4:10 PM IST
US-China Trade War to Help India Tap Export Opportunities, Suggest Experts
Cargo containers are seen stacked outside the container terminal of Jawaharlal Nehru Port Trust (JNPT) in Mumbai (Reuters)

New Delhi: The ongoing trade war between the US and China will help India tap export opportunities in both the countries in areas such as garments, agriculture, automobile and machinery, according to trade experts.

Professor at Indian Institute of Foreign Trade (IIFT) Rakesh Mohan Joshi said the US has broadly targeted intermediate components from China, particularly machinery and electronics, whereas China is targeting American automotive and agricultural products including Soybean.

"These areas offer huge opportunities for India. Strong opportunity is unfolding for India in apparel and readymade garments as after China, India is the only country in the world to match the scale of operations and integrate its supply chain for global customers," Joshi said.

He added that India needs to make use of this opportunity to significantly enhance its exports especially in information and communications technology (ICT) and the automotive sector.

"To effectively harness the emerging opportunities, India needs a carefully crafted strategy and its meticulous implementation at the grass-roots level," he said.

Sharing similar views, the Federation of Indian Export Organisations (FIEO) said the trade war between the US and China is benefitting India.

FIEO President Ganesh Kumar Gupta said India's exports to the US went up by 11.2 per cent in 2018, while to China it rose 31.4 per cent in the same year.

"China is also more willing than ever before to provide better market access to India on a wide range of agriculture and processed food products. India would be getting better access to Chinese market as China would like to prove to its citizen that the tariff war has little or no impact on it," he said.

The US and China are significantly raising import duties on each others' products. In international commerce parlance, trade war means increasing import duties by trading partners.

Recently, the US increased import duties from 10 per cent to 25 per cent on USD 200 billion worth of Chinese imports. The US is demanding China to reduce the massive trade deficit which last year climbed to over USD 539 billion.

FIEO Director General Ajay Sahai said it is a "God-sent opportunity" for India to seek huge investments from companies located in China.

"All investments in China with prime focus on the US market may seek relocation and India would definitely be the option. There is a need to move aggressively to woo such investors before they are allured by others," Sahai said.

Assistant Professor and expert on agri economics, Chirala Shankar Rao, said India should work on tapping export opportunities in the agriculture sector in both the countries.

"Indian exporters have all the potential to increase agricultural exports in both these countries," Rao added.

Echoing similar views, Ludhiana-based exporter and FIEO former president S C Ralhan said enormous opportunities are there in the engineering and machinery sector in both the countries and "we have to tap that".

Council for Leather Exports Chairman P R Aqeel Ahmed said the trade war will help India increase footwear exports to the US. "India's footwear exports to the US currently is about USD 300 million and Chinese exports to the US is USD 11 billion. Even if we get 10 per cent of this, our exports to the US can grow four times," Ahmed said.

India's bilateral trade with China and the US stood at USD 89.71 billion and USD 74.5 billion, respectively, in 2017-18.

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