Export of Indian products will increase in American markets; Possibility created by imposing high tariffs on three countries

New Delhi| America’s imposition of high tariffs on China, Mexico and Canada can help Indian exporters increase exports to the American market. The Trump administration has imposed tariffs on Mexico and Canada at 25 percent. Also, the duty on all Chinese imports has been doubled to 20 per cent.

SC Ralhan, nominated for the post of President of Federation of Indian Export Organizations (FIEO), said the imposition of tariffs on the three countries is expected to benefit Indian exporters in sectors like agriculture, engineering, machine tools, apparel, textiles, chemicals and leather.

Ralhan said, the high tariffs imposed by US President Donald Trump will affect exports from China, Mexico and Canada to the US, as they will increase the prices of their products in the US market. This will make the three countries less competitive on the export front. This is a huge opportunity for Indian exporters and they will have to take advantage of it to expand their reach in the US market.

India was the fourth largest beneficiary when the US imposed high tariffs on Chinese imported goods during the first term of US President Donald Trump.

Investment will come from American companies
Economic think tank GTRI says that this decision of America has increased the possibility of deepening the trade war. This is expected to help India increase its exports to US markets and attract investment from US companies. High tariffs on Chinese products also provide an opportunity for India to strengthen its manufacturing sector.

India will have to remain alert on comprehensive FTA
Donald Trump himself is no longer happy with his decision after replacing the North American Free Trade Agreement (NAFTA) with the US-Mexico-Canada FTA (USMCA) in 2018-19, GTRI founder Ajay Srivastava said. To avoid such a situation, India should be cautious about negotiating a comprehensive FTA with the US.

What’s worse, at the negotiating table, the US can demand from India not only tariff cuts, but additional concessions such as opening up government procurement, reducing agricultural subsidies, weakening patent protections, and allowing unrestricted data flow. However, India has been opposing it. Srivastava said, instead of FTA, India can offer a ‘zero-for-zero tariff’ deal to the US by proposing to abolish tariffs on most industrial products. Provided that America does the same for Indian goods also.