US-China Trade War Setto Benefit India

The US tariffs on China can create opportunities for Indian exports due to the trade diversion effects as US buyers will seek alternative suppliers to avoid higher costs - Ajay Sahai, Director General, FIEO

Country was 4th largest gainer when US imposed higher duties on Chinese goods during US President Trump’s first tenure

New Delhi: The trade war between the US and China is expected to benefit Indian exporters in increasing their shipments to the American market, sources said. They said the country was the fourth-largest gainer when the US imposed higher duties on Chinese goods during US President Donald Trump’s first tenure.

After coming to power again, Trump on Saturday signed an order to impose stiff tariffs on imports from China, fulfilling a campaign promise but raising the prospect of increased prices for American consumers. “India is likely to gain out of this trade war. Significant rise in exports are expected from India,” a source said.

Exporters have also stated that the imposition of customs duties by the US on imports from China provides huge export opportunities for India to America. The tariffs would affect exports from China to the US as they would push prices of their goods in the American market, making them less competitive.

“The move can create opportunities for Indian exports due to the trade diversion effects as US buyers will seek alternative suppliers to avoid higher costs,” Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said.

He said the extent of benefits depends on India’s production capacity and competitiveness. “The sectors which are likely to gain are electrical machinery and components, auto components, mobile, pharma, chemicals, apparel, fabrics,”Sahai added.