Trade tension between the US and China has the potential to open a brand new window for India. Sports goods, toys, cables, stationery, and electronic goods are some of the areas, from where the American importers are reaching out to India.
Trade tension between the US and China has the potential to open a brand new window for India. Sports goods, toys, cables, stationery, and electronic goods are some of the areas, from where the American importers are reaching out to India. Indian exporters are getting a lot of queries from American buyers about substituting for the goods supplied by China so far, Federation of Indian Export Organisations (FIEO) president Sharad Kumar Saraf said to Financial Express Online. He also added that the process of shift from a small sector has already started two to three years back. Increased manufacturing cost in China has also added to the buyers looking at the Indian market, Saraf added.
India has the opportunity to double its exports to the US in the given condition, while the exports can be increased by USD 40-50 Billion by adding new capacity, the FIEO president said. However, he added that the government’s role will be very important. Faster statutory clearances such as land etc and immediate processing of credit are the two most important things that can play a vital role. He mentioned that a huge amount of GST refunds are stuck with the government. Talking on the government’s role in boosting exports, Saraf added that the Chinese government immediately devalued its currency and increased refunds by 4 per cent for their traders. Similar, encouragement should be followed in India.
The US has imposed duties up to 25 per cent on some Chinese products, which has conversely made the Chinese products expensive for the US. China was in a trade surplus of around USD 350 Billion with the US in 2017, according to the Centre for International Development. The US total imports from China remained USD 480 Billion in 2017, ten times more than its total imports from India in the same year. The US has been importing sports goods, toys, cables, stationery, electronic goods, etc worth more than USD 200 Billion from China every year. However, after the Chinese products turned expensive by its own tariff hike, the US is looking at India as a potential replacement for China. This opens an opportunity for India to boost its exports in the coming few months before the competitors like Japan and Taiwan encash this opportunity.
….with the U.S., and wishes it had not broken the original deal in the first place. In the meantime, we are receiving Billions of Dollars in Tariffs from China, with possibly much more to come. These Tariffs are paid for by China devaluing & pumping, not by the U.S. taxpayer!
— Donald J. Trump (@realDonaldTrump) July 15, 2019
Also, after the Chinese economy faces slump, the US president has taken his joy to twitter, saying that the high-tariff imposed on China have resulted in many companies wanting to exit the China market for non-tariffed countries. He also wrote that the US is receiving billions of dollars of tariffs from China, with possibly much more to come.