U.S-China trade tension doesn’t impact India
Since, the start of the tariff wars in 2018, India is the only major Asian economy that has grown its export share with fewest trade links to China. According to the data, in the fourth quarter of 2017, the export share of India was 1.58% which rose to 1.71% in the first quarter of 2019. This was one of the good signs as at the same period, the export share of every other economy in Asia was going down.
In a recent interview, Shaktikanta Das, Governor of Central Bank said, “India is not part of the global value chain.” Further, he said, “So, U.S. –China trade tension does not impact India as much as several other economies.”
China’s export is the most affected in Asia
South Korea and Japan are two of the biggest suppliers of goods to China. China is the only country whose share of world exports has been most affected in Asia. After the U.S. and the U.A.E, China is the third-largest market for India.
Rakesh Mohan Joshi, a professor at the Indian Institute of Foreign Trade in Delhi said, “Our biggest advantage is that our product basket and market basket are both quite diversified.”
According to Ajay Sahai, director general and Chief Executive officer of the Federation of Indian Export Organisation, the trade tensions between China and the U.S have given India an opportunity to extent export to both countries.
India’s export is grew at faster pace as compared to the U.S
Sahai said, “China is more willing to give market access to India than ever before,” indicating towards increased access for products such as fruits and vegetables, rice and potential for increasing the exports of automobile components and pharmaceuticals to China.
According to the data, in more than a decade, China’s export rose to 31% which is the second-highest annual pace of growth, while in last six years ended in March 2018, India’s export grew at a faster pace as compared to the U.S.