Trade diversion due to US-China tariff war could boost Indian exports: Official

“Early indications from exporters suggest that traders successful India are receiving higher orders amid fears that tariffs volition emergence successful China. A akin tariff warfare antecedently helped India summation exports, arsenic it became the fourth-largest beneficiary of the commercialized diversion distant from China pursuing the tariff war,” an authoritative said.

A study from Oxford Economics past twelvemonth connected the effects of the US-China commercialized warfare during Trump’s archetypal word noted that US commercialized rerouting had been peculiarly pronounced successful the ample electronics market, wherever China’s stock had plummeted by 19 percent points since 2017.

“India’s stock successful US electronics imports has risen astir tenfold since then, reaching 2.1 per cent. Electronics present besides relationship for a greater stock of India’s wide exports, meaning the government’s ongoing efforts to go a high-tech powerhouse look to person partially paid off,” the study stated.

However, the study added that contempt this singular catch-up, India remains acold down its Asian peers successful presumption of competitiveness and, consequently, marketplace share.

“India chiefly supplies telecommunications equipment—such arsenic Apple ramping up its iPhone accumulation successful India, which accounted for astir two-thirds of each electronics exports successful 2023. More precocious electronics, specified arsenic semiconductors, are supplied by Korea and Taiwan. Moreover, China itself remains a important supplier, accounting for 27 per cent of full US electronics imports successful 2023,” the study said.

To amended seizure the commercialized diversion this clip around, the authorities has reduced basal customs duties connected a fig of items. But has kept the effectual rates connected a scope of items the aforesaid indicating a chopped successful cess moving forward.

The government’s determination successful the Union Budget to little import tariffs connected assorted goods is simply a deliberate determination to rationalise India’s commercialized tariffs, which had faced criticism—most notably from US President Donald Trump—for being excessively high, Finance Secretary Tuhin Kanta Pandey told The Indian Express.

He stated that the customs work changes announced successful the Budget would nonstop the close awesome to some the planetary marketplace and the home manufacture that India is focused connected rationalising and simplifying its import tariff structure.

The deliberation vessel Global Trade Research Initiative (GTRI) said that the apical 100 US export products accounted for 75 per cent of India’s full imports from the US, amounting to $42.2 cardinal successful 2023-24.

“While India’s elemental mean tariff is 17 per cent, the existent duties connected cardinal US imports are overmuch lower. Petroleum crude ($5.03 billion) faces a minimal work of Re. 1 per tonne, portion chopped and polished diamonds ($3.09 billion) are taxed astatine 0%, arsenic astir are reimports. Other large imports, including coking ember ($2.37 billion), aeroplanes implicit 15,000 kg ($1.94 billion), steam ember ($1.76 billion), and liquefied earthy state ($1.41 billion), transportation a humble 2.5 per cent duty,” GTRI said.

Gold successful unwrought non-monetary forms ($1.18 billion) is taxed astatine 6%, portion aluminium scrap ($0.89 billion) enjoys a 0% duty. Almonds ($0.87 billion) are taxable to a work of Rs 35 per kg. In reality, the weighted mean tariff connected US exports to India is beneath 5%, overmuch little than India’s wide tariff average, the deliberation vessel stated.