The U.S.-China trade war could lead to deeper trade ties between India and the U.S. In his speech on October 4 outlining the Administration’s Policy Towards China, Vice President Pence said, “to advance our vision of a free and open Indo-Pacific, we’re building new and stronger bonds with nations that share our values across the region, from India to Samoa.”
Strategists at Japan’s Nomura analyzed all the 7,705 items on the tariffs list from both sides. Their research showed that the U.S. list affects 3,477 products imported from China, with a combined value of $270 billion. Product categories are concentrated in electrical equipment, appliances and components (29%), machinery and mechanical appliances (22.7%) and furniture and related products (11.9%).
This trade war presents opportunities for India’s manufacturing sector — U.S. businesses are aware of India’s lucrative prospects as the fastest growing economy, expanding consumption patterns, and increasing integration into the global economy. Since businesses opt for markets that offer incentives, Indian states have the ability to proactively offer competitive packages with tax incentives.
U.S. suppliers who produce mineral, chemical and allied products; capital goods such as machinery, mechanical, and electrical equipment; vehicles and aircraft, and who are looking for alternate manufacturing bases can take into account India’s rising industrial activity.
With a large base of livestock, India presents opportunities to U.S. soybean suppliers too. India can also enhance its own exports of agricultural items, leather, rubber goods, base metal and machinery, textiles and chemical products, including pharmaceuticals, to the U.S.
