As US President Donald Trump imposes tariffs on Canada, China, and Mexico, Indian exporters are expected to increase their shipments to the US, experts say. The ongoing trade war between the United States and China can open new avenues for India as new market opportunities will open for New Delhi once Chinese exports to American shores are curtailed.
Experts are of the view that the current imposition of tariffs on Canada, China, and Mexico will give a boost to exports in India, including sectors such as agriculture, engineering, textiles, chemicals, and leather.
According to media reports, India emerged as the fourth largest gainer from Washington’s trade war with China during Trump’s first term. With Trump tightening the screws on China again and India adopting a modest stance by decreasing tariffs for US products, New Delhi’s chances of extracting benefits out of the shifting trade dynamics get a boost.
According to GTRI, a think tank, new trade barriers being put on these countries will present India with the chance to tap into alternative sourcing options.
Notably, America’s automobile sector is likely to be impacted the most following the imposition of tariffs. To put it into context, almost half of the cars sold in the US are imported, mostly from China and Mexico. The auto component makers are spread in North America, and these cross borders multiple times before the final product hits the road. With tariffs kicking in on almost every import, car prices are slated to rise.
India, which makes diesel and natural gas engines for industrial and automotive markets, stands the chance of gaining if it can tap into the opportunities being created.
Additionally, US tariffs are likely to make Canadian products more competitive in the global market, and India could evaluate sourcing these commodities from Canada at potentially lower costs, strengthening its trade partnership while reducing dependence on other high-cost suppliers, Ajay Srivastava, founder of Global Trade Research Initiative (GTRI), said.
Trump has decided to enforce fresh 25% tariffs on imports from Mexico and Canada, while it also goes ahead with a sharp increase in duties on Chinese products, giving Indian exports a lucrative prospect to ponder upon.
Moreover, India needs to enhance its manufacturing capabilities, which includes ensuring competitive pricing and meeting quality standards, to grab the export opportunities.