India China Chronicle November- December 2018

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www.icec-council.org

Vol 6, Issue 1, Nov-Dec 2018 EDITOR-IN-CHIEF Mohammed Saqib EXECUTIVE EDITOR Rajni Shaleen Chopra EDITORIAL BOARD Mani Shankar Aiyar PS Deodhar Prof Haixiao Song Dilip Cherian Shaodong Wang Amir Ullah Khan EDITORIAL TEAM Irfan Alam Audrey Tso Aishita Shukla DESIGN Manoj Raikwar OWNED, PRINTED AND PUBLISHED BY Mohammed Saqib Registered with the Registrar of Newspapers of India under RNI No: DELENG/2011/43423 PUBLISHED FROM A-82, Zakir Bagh, New Delhi - 110025 ADDRESS FOR ALL CORRESPONDENCE India-China Chronicle B-59 (GF), South Extension - II, New Delhi - 110049 Telefax: 011-46550348 PRINTED AT Aleena Prints Mr. Naved Rasheed Block Z-II, 378, Shahadra, Delhi-110053 Mobile:+91-9582345886 E-mail : aleenaprints@gmail.com All Rights Reserved. Reproduction in whole or in part without written permission is prohibited.

All advertising enquiries, comments and feedback are welcome at info@icec-council.org The information contained in this magazine has been reviewed for accuracy and is deemed reliable but is not necessarily complete or guaranteed by the Editor. The views expressed in this digest are solely that of the writers and do not necessarily reflect the views of India China Economic and Cultural Council (ICEC).

Sino-US trade war opens new windows of opportunity for India

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ndia and other Asian nations are looking forward to benefitting from the higher import tariffs imposed by US and China on each other as part of the ongoing trade war. According to a recent Reuters report, China’s exports unexpectedly fell the most in two years in December, while imports also contracted, pointing to further weakness in the world’s second-largest economy in 2019 and deteriorating global demand. Adding to policymakers’ worries, recent data also showed China posted its biggest trade surplus with the United States on record in 2018. The Reuters report said that this could prompt President Donald Trump to turn up the heat on Beijing in their bitter trade dispute. China is keen to have India on its side in this clash of titans. It has been talking to India about the need to counter “unilateralism and bullying tactics”, to fight “trade protectionism” and to defend free trade. India is aware that this shift in the Sino-US ties will lead to enhanced economic cooperation opportunity between India China. The trade war with the US is among China’s biggest worries externally. Internally, the country has to address the concern of a slowdown in its GDP growth for a decade. Geographically, India is the largest economy close to China. It offers China a staggeringly huge market for a wide range of goods and services. Bilateral trade between India and China rose to 84 billion dollars in 2017 despite the Doklam crisis and other areas of concern. The Economic Times reported a study by the Commerce Department, which stated that India can capture the Chinese commodity market vacated by US exports in the face of the higher import duties imposed on them by Beijing. The study analyzed and identified at least a hundred products where India can replace US exports to China, which totalled around $130 billion in 2017. The Commerce Department study said that these retaliatory tariffs provide a window of opportunity for enhancing India’s exports to China. The purpose of the analysis was to identify more such lines where India can boost its exports to China and reduce the trade gap. With China’s exports to the US going down in the wake of the trade war, India also sensed opportunity in enhancing exports to the US. In the second half of 2018, the Commerce Ministry started the exercise to consult various export councils to shortlist items where exports to the US could be boosted. Some sectors where India can made immediate gains are in the export of chemicals, pharmaceuticals and electrical parts. Earlier, India lagged behind China considerably in capturing the US market. Following the trade war, all these areas merit a re-look. The cost-disadvantage that India faced vis-à-vis Chinese products earlier isn’t as sharp as before. The tariffs imposed by China on US goods have given India an edge. An analysis by the Confederation of Indian Industry (CII) concluded that India can boost its exports to the US in sectors like machinery, electrical equipment, vehicles and transport parts, chemicals, plastics and rubber products. The CII analysis also stated that India can focus on many goods for expanding its exports to the US and China markets following the hike in duties by both countries on imports from each other. CII studied the list of items for which tariffs have been hiked, and the top exports from India to the US in this category. These products included pumps, parts for military aircraft, parts for electro-diagnostic apparatus, passenger vehicles of 1500-3000 cc, valve bodies and parts of taps. Their export can be boosted with sustained efforts.

Editor-in-Chief Mohammed Saqib

ICC-Nov-Dec 2018.indb 1

23-01-2019 PM 10:11:58


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