Escalation in US-China trade war may help India to increase exports: GTRI

The escalation in the US-China trade war is expected to help India increase its exports and attract investments from American companies, think tank GTRI said on Friday.

He said that last month, the US Senate introduced two bills that could intensify the trade war and have major global economic impacts if passed.

The 'Neither Permanent Nor Normal Trade Relations Act' (PNTR Act) and the 'Axing Non-Market Tariff Evasion Act' (ANTE Act) aim to counter China's trade practices by raising tariffs and imposing new trade barriers.

The PNTR Act seeks to phase out China's favourable trade status, while the ANTE Act targets non-market economies like China and Russia with tougher measures, the Global Trade Research Initiative (GTRI) said.

 

"While these bills aim to protect US industries, they also create opportunities for countries like India to grow their manufacturing sectors.

"As US companies look for alternatives to China, India could see increased investment in electronics, textiles, and manufacturing, enhancing its position in global supply chains," GTRI Founder Ajay Srivastava said.

In this background, he said, India should reconsider its proposals to invite Chinese firms and investment aimed at boosting exports.

The higher tariffs on Chinese products present an opportunity for India to strengthen its manufacturing sector, he added.

He also said that both bills create a potential for growth in local industries.

"As US companies reduce their reliance on China, India's expanding manufacturing sector, especially in electronics, textiles, and other industries, could attract more investment," he said.

The GTRI suggested to the government that India should actively work to attract investment from multinational companies seeking alternatives to China.

It will be essential to boost domestic production capabilities, especially in electronics, machinery, textiles, and solar panel manufacturing, to fill the gap left by reduced Chinese imports to the US.

"India should also reconsider inviting Chinese firms for export-related investments, as US actions against Chinese companies could impact India's own exports if tied to Chinese investments," it said.