The Federation of Indian Exporters Organisation (FIEO), in their pre-budget consultation on Thursday laid out in front of Finance Ministry officials how India could gain additional exports of USD 25 billion (roughly over Rs 2.1 lakh crore , as per present currency rates) over the next three years if Trump starts a trade war with China by imposing higher tariffs on the People’s Republic, as he has been threatening during his election campaign as well as pronouncements made since victory (Trump takes over as US President on January 20th).
That is, only if India plays its cards right.
“For that, we require increasing our presence in the US with showcasing in a large number of exhibitions, buyer-seller meets and tiw up with large local associations of retailers and distributors in the US with proactive support of the (Indian) government,” said Ashwani Kumar, President, FIEO, at the Budget Meet, and suggested a marketing scheme to focus on the US with a corpus of Rs 250 crore per year (Rs 750 crore over three years)
An FIEO study says India could get an additional USD 25 billion from sectors such as electronics and electricals, automotive parts and components, organic chemicals, apparel and textiles, footwear, furniture and home decor, toys, and so on.
For example, of America’s total electronics (including smartphones and TVs) imports last year of USD 436 billion, as much as USD 126 billion (or 27 per cent) came from China. While India’s share, despite Apple’s increasing manufacturing presence in India, was just 2.60 per cent, or USD 12 billion.
FIEO believes any Trump offensive against China could see more manufacturers leave the mainland, and might come to India as the next best alternative.
Of course, Trump has also, at times, threatened India, arguing that India imposes high import tariffs on certain American imports into India and that once he becomes president, he might look at reciprocal tariffs. Cutting down on India’s H1B visa quota would also be a measure that could hurt India badly.
“The need of the hour is to proactively utilise the opportunity rather than reacting to the situation,” said FIEO in its note.
