India hopes to increase exports of automotive parts, chemicals, electrical equipment, among others, commerce minister Suresh Prabhu says.
New Delhi: India will focus on boosting its exports to the U.S. and other global markets as Chinese shipments become unattractive amid a trade war between the world’s biggest economies, the country’s trade minister said.
New Delhi is focusing on a handful of items including automotive parts, chemicals, electrical equipment, among others, after the U.S. and China slapped reciprocal duties on each other’s goods, minister Suresh Prabhu said in an interview. India’s share in global merchandise exports is at 1.7 percent compared to China’s 12.8 percent.
“The ongoing trade tensions between the U.S. and China may have positive impact,” Prabhu said in a written reply to questions. “The long term strategy is to focus on enhancing manufacturing capabilities with focus not only on the United States but also keeping in view the demands in other markets, as well.”
With President Donald Trump expected to go ahead with another round of tariffs on $200 billion of imports from China in January, India looks to gain from opportunities from the dispute. Southeast Asia, a region that’s mastered export competitiveness, is already seeing a boom in foreign direct investment as the trade war prompts companies to shift production to the region.
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Prime Minister Narendra Modi’s administration has been exploring ways to close the gap between exports and imports which reached $17.1 billion in October. The government has imposed some import curbs to ease pressure on the current-account deficit, a key vulnerability for the economy and one of the reasons why the rupee has lost more than 11 percent against the dollar this year.
The rising tensions could derail established trade orders like the World Trade Organization and will hurt smaller nations, Prabhu said.
“This is not a welcome development for sustaining a free and fair trade,” he said.