China denies delay in granting permissions to Indian flight to Wuhan
Delhi's cleaner days up 50% in 2019; is air quality finally improving?
PhonePe, Google Pay May Be Hit by NPCI's New Zero UPI Interchange, Payment Service Provider Fees Rule
Indonesia proposes to tax polluting cars, sweet drinks, plastic
Manmohan Singh calls $5 trillion economy target 'wishful thinking'
Rupee Falls To 71.81 Against US Dollar
Arvind Kejriwal Has Refused To Take Any Ministry, Again
Coronavirus-Themed Malware Is Spreading Fast, Says Check Point Research
World's largest cricket stadium all set to host POTUS - Kem chho Trump!
Arvind Kejriwal will take oath as Delhi Chief Minister on Sunday
40 People Killed, 9 Soldiers Injured In Spate Of Attacks In Central Mali
Transmission of policy rate cuts steadily improving: Shaktikanta Das
Ayushman Bharat beneficiaries to get upto Rs 15 lakh aid under RAN scheme
Skoda’s First Electric SUV To Be Called Enyaq
FASTags to be available for free for 15 days from Feb 15-29
Election Results 2020 Updates: AAP wins a landslide victory in Delhi assembly election 2020
Budget 2020: FM Nirmala Sitharaman should make taxpayer-friendly announcements like pre-filled ITR forms
Economic Growth Set To Bounce Back As Slump Bottoms Out: Sanjeev Sanyal
Government Moving Fast On Electric Vehicle Adoption
New Zealand Women's Captain First Cricketer To Achieve Incredible T20I Milestone

Latest Posts

Will US-China trade truce impact India?

international news india

India's key trade partners, the United States and China, just announced a truce in their 18-month long trade war after China agreed to boost the purchase of US goods and services by additional $200 billion in two years. The US, in return, will withdraw the additional tariffs it announced on some Chinese products.

Will it impact India's plans to deepen its engagements with both the US and China? Especially since India was hoping to become one of the sourcing destinations for both the countries when retaliatory tariffs and restrictions on trade make some products more expensive and hence alternate markets become more attractive? The answer is 'no', at least for now.

Firstly, the truce itself is not complete. It is just the beginning. The US decision is partially to put on hold or cancel its planned decision to slap additional tariffs on products like toys or cellphones. Wherever existing tariffs have seen a reduction because of the truce, the 7.5 per cent tariff rate still remains.

Further, a huge set of products are still carrying the high tariffs that were imposed by both countries as part of the trade war. A 25 per cent tariff on $250 billion worth of Chinese goods imported to the US remains and China's retaliatory tariffs on goods worth over $100 billion also remain. Until further negotiations between the two countries lead to a substantial reduction in tariffs across the board, the opportunities India was looking to explore, more or less, remain intact.

Secondly, trade experts are of the firm belief that even if there's a rollback, it is likely to be from 25 per cent to say, 10 per cent and not a complete rollback, which leaves some cushion for India. They also point out that India was not looking at the US-China tussle as just another trade opportunity but to attract investments.

Ajay Sahai, Director General & CEO of the Federation of Indian Export Organisations, says the investment part is already beginning to happen. Chinese companies, whose main market is the US, are now coming to India for investment as they feel even 10 per cent tariff may take away their competitiveness, he adds. "They are looking to invest into the Indian MSMEs (small and medium scale enterprises) as they (Chinese) feel Indian MSMEs have the flexibility to execute such orders if some capital or technology is infused into them," he says.

It seems small industrial towns like Ludhiana and Coimbatore, particularly with their prowess in engineering, are the focal points of such investments. And that's good news.

Do you think so?

  • 231
  • 121
  • 98
×

Alert Message

Ok
Please Wait...

Share the Opinion Poll with your Friends At

Ok

Share the Survey with your
Friends At

Ok
×

Statistics

Ok
No
×

Statistics

Ok