News ID: 254429
Published: 0255 GMT June 17, 2019

India may trade places with US to ship items to China

India may trade places with US to ship items to China
Reuters

India has identified 151 products that it can export to China instead of the US and benefit from the price advantage thrown up by the retaliatory higher duties slapped by the Xi Jinping government on US products amid the intensifying trade war between the two countries.

The trade war between the US and China has opened a window of opportunity for India to record additional exports in case of at least 354 items — ranging from capital goods to base metals — worth billions of dollars, according to a new study by Commerce Ministry. 

Of the 774 American tariff lines (items) on which China has imposed extra duties, India can ship out more and replace the US, especially in 151 items, the study suggested. In these 774 items, China’s imports from the US stand at an annual $20.4 billion, Financial Express reported.

However, while India exports these items worth $32.8 billion to the world, it ships out only $2.9 billion to China. This means there is a huge scope for India to replace the US. However, as has been pointed out by analysts, benefits to India are contingent on greater competitiveness as well as its ability to scale up production to meet higher demand.

Similarly, of the 531 tariff lines on which the US has imposed additional duties on China, India can export more, more so in 203 items. In these 531 items, China’s supplies to the US are to the tune of $30.6 billion a year. While India ships out these items worth $22.2 billion to the world, it exports only $2.4 billion to the US.

India has decided to raise tariffs on imports of 29 goods from the US after having deferred the move several times since announcing it last year, media reported Saturday.

The government had said last June it would raise import taxes on a slew of US goods including almonds and apples, apparently irked by Washington's refusal to exempt New Delhi from higher steel and aluminum tariffs.

The study by Commerce Ministry said the trade war may bring about a shift in the global trading patterns due to spillover effects and displacement of the bilaterally traded communities to other countries. The Indian products which can tap the Chinese market include copper ores, rubber, paper/paperboard, equipment for transmission voice/data in a wired network, tunes and pipes.

Similarly, domestic goods which can grab exports opportunities in the US market include industrial valves, vulcanized rubber, carbon or graphite electrodes and natural honey. Increasing exports would help India narrow the widening trade deficit with China, which stood at around $52 billion in 2018-19.

 

   
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