Impact of US Tariffs on China: Opportunities for Indian Exporters
The US’s increased tariffs on imports from China, Mexico, and Canada may benefit Indian exporters in sectors like agriculture and engineering. Experts suggest that Indian exporters could capitalize on reduced competitiveness of these countries in the US market. However, concerns about negotiating a comprehensive FTA with the US and possible additional demands highlight the need for a cautious approach, possibly favoring a ‘Zero-for-Zero Tariff’ strategy.
During Donald Trump’s initial term, the United States raised tariffs on Chinese goods, benefitting several countries, including India. As the US imposes increased tariffs on imports from China, Mexico, and Canada, experts suggest that Indian exporters may seize new opportunities in various sectors such as agriculture, engineering, and textiles. With duties raised to 25 percent on imports from Mexico and Canada, and Chinese tariffs reaching 20 percent, Indian exporters stand to gain more traction.
SC Ralhan, the President-designate of the Federation of Indian Export Organisations (FIEO), stated that these tariffs could significantly benefit Indian exporters in diverse fields. The higher import costs of goods from China, Mexico, and Canada are likely to enhance the competitiveness of Indian products in the US market. Consequently, Ralhan emphasized the need for Indian exporters to aggressively pursue these emerging opportunities.
Furthermore, the GTRI think tank posits that the ongoing trade tensions may bolster India’s export capabilities and lure investments from American companies. This situation presents a unique opportunity for India to fortify its manufacturing sector as a response to the heightened tariffs imposed on Chinese goods. Ajay Srivastava, the GTRI founder, reflected on how Trump’s past dissatisfaction with NAFTA led to the creation of the USMCA. He cautioned Indian negotiators about entering into a comprehensive Free Trade Agreement (FTA) with the US.
Srivastava warned that the US might insist on extensive concessions beyond tariff reductions, including changes to government procurement practices and agricultural subsidies. To navigate these complexities, he recommended that India consider proposing a “Zero-for-Zero Tariff” arrangement with the United States, where both countries would eliminate tariffs on most industrial goods from one another.
In summary, the US’s heightened tariffs on imports from China, Mexico, and Canada present significant opportunities for Indian exporters across various sectors. However, while these conditions could enhance India’s trade position, experts advise caution in negotiating an FTA with the US, given the potential demands for additional concessions. A strategic approach, such as proposing a ‘Zero-for-Zero Tariff’ deal, may offer a more balanced trade relationship. Overall, India must adeptly navigate the shifting trade landscape in response to US tariffs while leveraging potential growth opportunities.
Original Source: www.hindustantimes.com
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