India is moving swiftly to take advantage of the emerging global order as the trade wars between the US and China are worsening with tit-for-tat tariff increases. The Commerce Ministry under Piyush Goyal has realised the importance of the nation preparing for a prolonged trade conflict with US President Donal Trump raising to 25 per cent from 10 per cent tariff on imports worth $200 billion. After Chinese President Xi Jinping retaliated with 25 per cent tariff on imports from the US worth $60 billion, Trump has threatened another round of tariff revision that could hit $300 billion more of imports from China.
The ongoing trade war between the US and China offers an opportunity to boost exports of as many 350 products such as chemicals and granite to the two countries, a study by the Commerce Ministry has said. The study says the tariff wars present a big window of opportunity for enhancing India's exports to these two nations, media reports say.
On the Chinese front, the study suggests as much 151 domestic products including diesel, X-ray tubes, and certain chemicals can displace the US products from the Chinese markets. On the other hand, 203 Indian goods like rubber and graphite electrodes can easily displace Chinese exports in the US markets, PTI says.
The ministry study has identified specific products in which India has potential to immediately expand exports to China based on its strengths and available market access and has shared the list with the ministries concerned to take follow-up action. The study also lists products that may require more efforts to acquire market access.
The ongoing trade war may change the global trading patterns due to spillover effects and displacement of the bilaterally traded commodities to other countries, the study says. Among the Indian products that will have a definite advantage in the Chinese market are copper ore, rubber, paper/paperboard, equipment for transmission voice/data in a wired network, tubes, and pipes. Similarly, the goods which can explore the US market include industrial valves, vulcanized rubber, carbon or graphite electrodes, and natural honey.
Prime Minister Narendra Modi's is aware that India must take every opportunity to narrow the widening trade deficit with China which was $50.12 billion from April 2018 to 2019. Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta said India could benefit on both fronts from the trade war between the US and China. India's exports to the US rose by 11.2 per cent in 2018 and those to China by 31.4 per cent in the same year, the report says.