Indian products can be more competitive in the shadow of the US-China trade war

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  • The Competition Commission of India (CCI) ran an analysis which revealed which industries India should focus on for export.
  • The CCI also recommended that India focus on its competitive advantages in trade when dictating its strategic dialogue with the US.
  • On the other hand, foreign direct investments will improve only once the government can instil confidence in American investors about India’s business climate.

India’s fair play watch-dog, the Competition Commission of India (CCI) thinks there’s an opportunity for India to capitalise in the midst of the US-China trade war. Indian exports can leverage the additional 25% import duty on commodities from China imposed by the American administration to their advantage.

This essentially makes China’s products more expensive in the US, where the competitive price of India’s products can bring them in as substitutes.

India’s leading exports to the US include pumps, passenger vehicles of 1500-3000 cc, parts of taps, parts of military aircrafts, valve bodies and parts of electrodiagnostic apparatus. Cumulatively, they accounted for $50 million of export trade in 2017.

The industry chamber conducted an analysis which concluded that if India focuses on machinery, electrical equipments, vehicles and transport parts - exports can be increased with concerted efforts. Other Asian countries like Vietnam, Indonesia, Thailand and Malaysia have already increased their exports to the US in recent years.

Other recommendations

The CCI also proposed that India should keep its competitive advantage in the sectors of textiles, footwear, mobile phones, toys and games in mind when dictating the strategic dialogue with the US. The chamber justified that such an endeavour would encourage the concerned growing industries in India.

Even foreign direct investments have the potential to increase, but only if the government can instil confidence into foreign investments. It was only recently that India’s draft on the new e-commerce policy rolled out and ruffled a few feathers. Amazon Inc and Walmart have even roped in the Trump administration to address their concerns to the government of India.

And, it’s not only about the US. The CCI also recommended that India can expand its exports into China as well to capitalise on the hike in duties by both countries on imports exchanged between the two.

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