US-China Trade Tensions Might Open Door For India’s Export Growth: GTRI

New Delhi, Oct 5 (KNN) Recent developments in the US-China trade dispute could potentially benefit India's export sector and attract American investments, according to a report released Friday by the Global Trade Research Initiative (GTRI), a prominent economic think tank.

The US Senate's introduction of two bills last month, the 'Neither Permanent Nor Normal Trade Relations Act' (PNTR Act) and the 'Axing Non-Market Tariff Evasion Act' (ANTE Act), signals a possible intensification of the ongoing trade tensions. 

These proposed legislations aim to address perceived unfair trade practices by China through increased tariffs and new trade barriers.

GTRI Founder Ajay Srivastava noted that while the primary objective of these bills is to safeguard US industries, they may inadvertently create opportunities for other nations, including India, to expand their manufacturing sectors. 

As American companies seek alternatives to Chinese suppliers, India could see increased investment in key areas such as electronics, textiles, and manufacturing, potentially enhancing its position in global supply chains.

The PNTR Act proposes a gradual reduction of China's favourable trade status, while the ANTE Act targets non-market economies like China and Russia with more stringent measures. 

In light of these developments, Srivastava suggested that India should reconsider its proposals to invite Chinese firms and investments aimed at boosting exports.

The GTRI report emphasises that higher tariffs on Chinese products present an opportunity for India to strengthen its domestic manufacturing sector. It advises the Indian government to actively work towards attracting investment from multinational companies seeking alternatives to China. 

The think tank highlights the importance of enhancing domestic production capabilities, particularly in electronics, machinery, textiles, and solar panel manufacturing, to fill the potential gap left by reduced Chinese imports to the US.

However, the report also cautions that India should carefully consider its approach to Chinese investments in export-related sectors, as US actions against Chinese companies could potentially impact India's own exports if closely tied to Chinese investments.

As the global trade landscape continues to evolve, these developments underscore the complex interplay between international trade policies and their potential impacts on emerging economies like India.

(KNN Bureau)