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Will India gain from US-China trade war?

CII calls for increase exports to US

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CII calls for increase exports to US

 

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India can gain export market share from the United States-China trade war by expanding the number of products it ships to the two countries.

The Confederation of Indian Industry (CII) believes that certain products may become more competitive as the US impose additional duty of 25% on products imported from China on 23 Aug 2018.

As per CII’s analysis, India should consider exporting machinery, electrical equipment, vehicles and transport parts, chemicals, plastics and rubber products to US.

Countries such as Vietnam, Indonesia, Thailand and Malaysia have increased their exports of these products to the US in recent years, noted CII.

Based on India’s current exports to the US in these categories, products such as intermediate parts for the defense and aerospace sector, vehicles and auto parts, engineering goods, etc. have a higher potential for export, according to CII.

It said exports should also be encouraged from sectors like apparel and textiles, footwear, toys and games and cell phone manufacturing which are becoming competitive industries in India.

CII has suggested that the trade dialogue with the US should be strategized taking into account India’s competitive advantage in these products.

Foreign direct investments from the US should be encouraged by boosting confidence of American companies in India’s business climate. This might necessitate addressing their concerns regarding non-tariff barriers in India for better outcomes in the long term.

In the domestic industry, CII called for enhanced productivity while adding technology to production processes.

CII has put forward the following recommendations:

I. The Merchandise Exports from India Scheme (MEIS) under the Foreign Trade Policy 2015-2020 includes major product groups of interest to the US and should be used to build exports in the identified categories.

II. Indian companies require better access to export credit to intensify the export effort.

III. Micro, small and medium enterprises (MSME) should be supported in exporting intermediate and high-technology products.

IV. Trade facilitation must be a high priority to lower transaction costs and enhance competitiveness.

CII said it has examined 818 product lines where the US has raised tariffs for imports from China.

Between 2012 and 2017, China’s exports to the US have moved up the value chain with accelerated growth in high-technology items such as telecommunications equipment, automotive, cell phones, etc.

Top exports from India to the US which are covered in the list of items for which tariffs have been hiked include pumps, parts of military aircraft, parts for electrodiagnostic apparatus, passenger vehicles of 1500-3000 cc, valve bodies and parts of taps.

Exports of these items stood at over $50 million in 2017 which can be increased with concerted efforts, stressed CII. fiinews.com

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