Is it a gloomy future for Indian and Chinese exports?
Can India and China come together to fight President Donald Trump-initiated trade war – it is a big challenge and a big question today.
What will be the fate of China’s multi-billion dollar, with million of employees, factories if Washington manages to put a big check on free flow of Chinese goods by imposing already announced higher tariffs?
How will India’s nascent ‘Make in India’ initiative progress if taxes on low-cost Indian goods are raised so their landing prices in the US face tough competition from American production houses’ higher-cost and superior-grade products?
It seems both India and China have taken some initial steps as Chinese companies have signed 101 commercial deals worth US$2.37 billion on 24 Mar 2018, ahead of a proposed meeting between Commerce and Industry Minister Suresh Prabhu and his Chinese counterpart Zhong Shan next week.
Prabhu and Zhong meet in New Delhi to discuss ways to expand bilateral trade and Washington’s tariff hikes on imports especially aimed at goods from China and India.
The Delhi deals were signed representatives of 30 Chinese companies visiting India, according to Indian media reports.
The deals come at a time when New Delhi is looking to balance the widening trade deficit with Beijing. But India remains concerned about its widening trade deficit, which in 2017 was US$51.75 billion out of the US$84.44 billion bilateral.
Both countries are trying to maintain commercially-friendly relations for being the world’s two largest markets based on the large-scale Chinese manufacturing capacity and rising local demand, as well as India’s ever increasing or insatiable consumer-driven demand and efforts to build export-oriented manufacturing hubs.
However, there is a trust-deficit between businesses of the two countries, which claims disputed territories with muscle flexing armies.
“Well, will both countries be able to work against President Donald Trump’s trade policies while having war-tone rhetorics between themselves,” asked a diplomatic source, pointing to India’s urgent need for American investments and technologies, especially for the ‘make in India’ initiative.
Trump has raised tariff on imports that would hurt the Chinese supplies to the American market much more than it would do so to the comparatively smaller value and volume supplies from India, trade observers said.
The Chinese, if, in worst case scenario, badly hit by Trump driven global trade war, will be seeking Asian markets within the immediate neighbourhood where India remains the biggest and and most lucrative market, according to the observers.
For this, India is not open to any flooding of Chinese products. fii-news.com
