New Delhi:
The announcement by US President Donald Trump on the products coming from China, Mexico and Canada has created a stir in markets around the world. However, this decision can also prove to be a golden chance for India. Indian exporters are likely to get new opportunities by the US imposing high tariffs (duty) on imports from China, Mexico and Canada.
Experts say that it can benefit from areas like agriculture, engineering, machine tools, clothes, chemical and leather industry. Earlier, when the Donald Trump administration had increased the tariff on China, India was among the four top countries which had directly benefited from it.
Is Trade War a big opportunity for India?
If India adopts the right strategy, it can achieve a better trade agreement with America and strengthen its hold in the US market. In such a situation, this trade war can prove to be a big opportunity for India. This will not only promote Indian exports, but can also attract American companies to invest in India.
In addition, the high tariffs imposed on China can give India an opportunity to further strengthen its manufacturing capacity.
Which sectors will benefit?
The products of China, Mexico and Canada in the US market can create new opportunities for Indian exporters. The Trump administration has announced a 25% duty on imports from Mexico and Canada and 20% duty on imports from China. This will make the exports from these countries to the US expensive, which will reduce their competition capacity. India can directly benefit from this, because Indian products will be cheaper than this and can strengthen their place in the US market. Although these sectors are likely to get the most benefits:
- Agriculture and Food Products – Tea, coffee, spices and fish production will be promoted.
- Manufacturing and Industrial Products – Machine tools, engineering products and automobile sectors will benefit.
- Textile and Garments – Indian clothing and textile demand may increase.
- Chemical and Pharma – Medicines and chemical industry can get new possibilities in America.
- Leather and Footwear – Indian products will be more competitive than expensive products in China.
How will the new door to India open?
Trump has talked about installing Risiprockle tariffs for India and China from April 2, but if India acquires a favorite free trade agreement (FTA), it can increase the scope of its business in America.
- If there is a trade agreement between India and the US, American companies can set up manufacturing units in India. This will promote Make in India (Make in India) and will create new employment opportunities.
- Indian products can sell more due to low price and good quality than expensive goods from China, Mexico and Canada.
- India can get a great opportunity to increase exports in the American market, which will strengthen the country’s economy.
What will be the challenges in front of India?
However, India will also have to face many challenges to capitalize on this opportunity:
- Celebrating America for Free Trade Agreement (FTA) – This will be the biggest challenge for India.
- Global supply chain instability – If the supply chain is affected globally, it can also affect India.
- Domestic markets and safety of farmers – India will also have to take care of the safety of its domestic industries and farmers.
What do experts say?
In a conversation with NewsDeskReport, Ajay Dua (former Secretary, Government of India), Dr. Zakir Hussain (Foreign Policy Specialist) and Rahul Gupta (Trade and Tax Expert) said that the tariff on China by the US can become a big opportunity for India.
Ajay Dua said that the policies of America are unprotected (uncertain), but in this situation India can benefit. At the same time, according to Dr. Zakir Hussain, if India adopts the correct strategy, then agriculture, manufacturing, defense and service sector will be of great benefit. Rahul Gupta said that India’s service trade is $ 39-40 billion, and it can become stronger by increasing trade with America.
Free trade agreement can be a game-changer for Indian economy
New tariffs by the US on China, Mexico and Canada can open new avenues for India. If India acquires free trade agreement and strengthens its export sector, then it can prove to be a game-changer for the Indian economy. However, India will have to be ready to adopt the right strategy and face challenges.