India is expected to gain out of the imposition of 10% tariffs by the US on China as exporters are looking at significant increase in orders, a senior official said Tuesday.
“The government has discussed this (US tariff action) with the exporters also and got positive feedback about the mood and the sentiment about the export orders. They are seeing a significant rise in export value,” the official who did not wish to be named said.
“Increase in orders from the US has already started. As the tariffs have been imposed now the orders will go up. It (tariffs on China) will be positive for India as in many products India is competing directly with China,” chief executive officer and director general of Federation ofIndian Export Organisations (FIEO) Ajay Sahai said.
The sectors that will likely benefit from the higher duties on China include mobiles and electronics, electronic machinery, apparel, leather and footwear, furniture, pharma and toys, he said.
Sahai said the US buyers are asking Indian companies who also have manufacturing operations in China to supply from their Indian facilities due to the uncertainty even if the costs at Chinese operations are less.
The official said historically whenever there has been a trade war between US and China, India has benefitted. “Then (when the US-China trade war started in 2018) our exports to the US were around $ 57 bn. It went up to $ 73 bn. During the 1-2 years of trade war time India saw a significant jump in our exports to the US,” he added.
Among the beneficiaries of the previous showdown regarding tariffs, India was the fourth biggest gainer.
According to the sources India, however, is not going to be completely immune. “There will be some products on which the US might also take some action or may not in the future. But irrespective of what is happening to India in future, India is likely to gain out of this by this US and China trade war,” he added.
US President Donald Trump has already announced that he will be putting additional duties on steel, aluminium, pharma and semiconductors. Barring semiconductors India has substantial exports of pharma, steel and aluminium to the US.
Sahai said retaliatory tariffs by China on US products would not impact India because India is not present in the market for products that China buys from the US. In response to 10% tariffs by the US, China has announced imposition of 15% duty on US coal and liquefied natural gas and 10% on oil and agricultural equipment..
FIEO’s Sahaisaid India, however, will have to keep a sharp eye on any dumping that China might resort to after losing access in its biggest market.
