Getty images
High prices on China and Bangladesh can help Indian textile manufacturers develop on the American market
Donald Trump’s radical rates have shaken world trade, but disturbances often creates opportunities.
From April 9, Indian products will face at prices up to 27% (Trump’s tariff table lists the rate of India at 26%, but the official order indicates 27% – a difference seen for other nations also). Before the rise in prices, American rates between business partners were on average 3.3%, among the lowest worldwide, against 17% of India, according to the White House.
However, the United States imposing even higher prices on China (54%), Vietnam (46%), Thailand (36%) and Bangladesh (37%), India “presents an opportunity” in textiles, electronics and machines, according to the Research Initiative on the Delhi (GTRI) reflection group (GTRI).
High prices on Chinese exports and Bangladais have open spaces for the manufacturers of Indian textiles to develop on the American market. While Taiwan leads to semiconductors, India can use packaging, tests and the manufacture of low -end fleas – if it strengthens infrastructure and political support. Even a change in partial supply chain of Taiwan, caused by 32%prices, could operate in favor of India.
Machines, automobiles and toys – The sectors led by China and Thailand – are ripe for relocation focused on prices. India can capitalize by attracting investments, widening production and stimulating exports to the United States, according to a GTRI note.
But will India be able to grasp the moment?
High prices have increased costs for companies depending on global value chains, hampering India’s ability to compete in international markets. Despite growing exports – mainly motivated by services – India manages a significant trade deficit. The share of India in global exports is only 1.5%. Trump repeatedly marked India a “Roi Price” and a “great attacker” of commercial ties. With its new prices, fear is that Indian exports are less competitive.
Reuters
From April 9, Indian products will face prices up to 27%.
“Overall, the United States protectionist pricing regime could act as a catalyst for India to draw global realignments from the supply chain,” said Ajay Srivastava de Gtri.
“However, to take advantage of these opportunities, India must improve its ease of doing business, invest in logistics and infrastructure and maintain policies stability. If these conditions are met, India is well positioned to become a global center for world manufacturing and export in the coming years.”
It’s easier to say than to do. Biswajit Dhar, a commercial expert from the Reflection Group of the Social Development Council based in Delhi, stresses that countries like Malaysia and Indonesia are perhaps better placed than India.
“We can find a land lost in the clothes now that the Bangladesh faces higher prices, but the reality is that we have treated clothes like a sunset sector and has not invested. Without strengthening capacity, how can we really benefit from these price changes?” said Mr. Dhar.
Since February, India has increased its efforts to win the favor of Trump – promising 25 billion dollars in American energy imports, courting Washington as the first defense supplier and exploring the F -35 hunting agreements. To facilitate trade tensions, it abandoned the 6% digital advertising tax, reduces the prices of Bourbon whiskey to 100% to 150% and reduced tasks on luxury cars and solar cells. Meanwhile, Starlink by Elon Musk is approaching final approval. The two countries have launched large commercial talks to reduce the US $ 45 billion trade deficit with India.
However, India has not escaped the tariff war.
“India should be concerned – there was hope that the current trade negotiations would protect it from reciprocal prices. To face these prices is now a serious setback,” said Abhijit Das, former head of the Center for WTO studies at the Indian Foreign Trade Institute.
Getty images
Exports to key sectors such as electronics and engineering products could take a new price plan
An advantage: pharmaceutical products are exempt from reciprocal rates, relief for generic drug manufacturers. India provides almost half of all generic drugs in the United States, where these alternatives at lower cost represent 90% of the prescriptions.
However, exports to key sectors such as electronics, engineering products – automotive parts, industrial machines – and marine products could take a hit. It would be particularly disturbing for electronics, given heavy investments thanks to the flagship production regimes (PLI) of India to stimulate local manufacturing.
“I appreciate the capacity of our exporters – many are small manufacturers who will have trouble absorbing a tariff increase of 27%, which makes them non -competitive. High logistics costs, the increase in commercial spending and the deterioration of commercial infrastructure only add to the challenge. We are starting to a major disadvantage,” explains Mr. Dhar.
Many consider these prices as a Trump negotiation program in commercial negotiations with India. The latest report of American sales representatives underlines Washington’s frustration towards India’s trade policies.
Released on Monday, the report signals the strict rules of India on dairy products, pork and fish, requiring certification without GMOs without scientific support. He also criticizes India’s approval process for genetically modified products and price ceilings on stents and implants.
The concerns of intellectual property landed India on the “priority surveillance list”, for which the report cites weak patent protections and a lack of secret laws. The report is also concerned about data location mandates and restrictive satellite policies, the maintenance of commercial links. Washington fears that the regulatory approach to India is increasingly reflecting China. If these barriers were removed, American exports could increase by at least $ 5.3 billion a year, the White House.
“The timing could not be worse – being in the midst of commercial negotiations only approvals our drawback. It is not only a question of access to the market; that is the whole,” explains Mr. Dhar. In addition, winning an advantage over Vietnam or China will not occur overnight – construction opportunities and competitive strength take time.
