Trade war between US and china – would India benefit from it?

The ongoing trade war between the US and China will help India tap export
opportunities in both the countries in areas such as garments, agriculture, automobile
and machinery. According to trade experts, US has broadly targeted intermediate
components from China, particularly machinery and electronics, whereas China is
targeting American automotive and agricultural products including Soybean. India
should start developing a carefully crafted strategy and its meticulous implementation
at the grass-roots level so that they can effectively harness the emerging opportunities

These areas will be a big opportunities for India. Because after china, India is the only
country in the world to match the scale of operations and integrate its supply chain for
global customers. This will be a Strong opportunity unfolding for India in apparel and
readymade garments. Professor at Indian Institute of Foreign Trade (IIFT) Rakesh
Mohan Joshi also said that India needs to make use of this opportunity to significantly
enhance its exports especially in information and communications technology (ICT) and
the automotive sector. With the trade war between US and china, India's exports has
seen a growth in the last year. Exports to US went up by 11.2 per cent in 2018, while to
China it rose 31.4 per cent in the same year.

China is also more willing than ever before to provide better market access to India on a
wide range of agriculture and processed food products. India would be getting better
access to Chinese market as China would like to prove to its citizen that the tariff war
has little or no impact on it.

Recently, the US increased import duties from 10 per cent to 25 per cent on USD 200
billion worth of Chinese imports. The US is demanding China to reduce the massive
trade deficit which last year climbed to over USD 539 billion. All investments in China
with prime focus on the US market may seek relocation and India would definitely be
the option. There is a need to move aggressively to fetch up such investors before they
are allured by others. Indian exporters have all the potential to increase agricultural
exports in both these countries along with enormous opportunities are there in the
engineering and machinery sector in both the countries and we have to tap that.

China is more willing to give market access to India than ever before, pointing to
increased access for products such as rice, fruits and vegetables, with potential for
greater exports of pharmaceuticals and automobile components to China. Apart from
trade, diversion in investment flows is an opportunity that India could benefit from, as
manufacturers seek alternative origination destinations. India is already competitive in
these industries globally and will likely be well-placed to meet further demand in these
areas.

India is already competitive in these industries globally and will likely be well-placed to
meet further demand in these areas and more changes to existing laws are needed
before India can reap the full benefits of these investments to boost the economy. The
changes need to be not just top down from the central government, but also bottom up
from different state governments.