Trade War Effect: India Only Asian Country To Grow Export Amid US-China Economic Standoff

Amidst the ongoing trade-standoffs between major economies of the world, the only major Asian country that has grown its export share over the last one year is the one with very limited trade links with China.

Some recent reports suggest that even China is witnessing a slowdown in growth over the recent past. (Image: Getty)

Trade War Effect: Amidst the ongoing trade-standoffs between major economies of the world, the only major Asian country that has grown its export share over the last one year is the one with very limited trade links with China. According to a recent report by news agency Bloomberg, India’s share of world exports rose to 1.71 per cent in the first quarter of 2019 from 1.58 per cent in the fourth quarter of 2017. On the contrary, share of all other Asian exporting nations dipped in the same period. When asked about the same, Reserve Bank of India (RBI) Governor Shaktikanta Das said that the reason behind India's out performance is because its not as integrated into global manufacturing supply chains compared to other Asian countries. It means that exporters are cushioned from rising trade tensions in the region. “India is not part of the global value chain. So, US-China trade tension does not impact India as much as several other economies,” he said. Some recent reports suggest that even China is witnessing a slowdown in growth over the recent past. The trade data between the US and China shows that in absolute terms Chinese exports to the USA have gone down from $42.6 billion in June FY-18 to $39.3 billion in June FY-19. China is the biggest buyer of goods from South Korea and Japan, whose share of world exports have fallen the most in Asia. For India, China is the third-largest market, after the US and the UAE, the report said. Experts believe that the US-China trade war has given India an opportunity to ramp up exports to both countries. Quoting a data from Ministry of Commerce show, the Bloomberg report stated that India’s exports to the US grew at the fastest pace in six years in the year ended March 2018, while exports to China surged 31 per cent, the second highest annual pace of growth in more than a decade. However, as a matter of concern, India’s exports to the US could lose momentum. This is because of the fact that US President Donald Trump has clearly indicated that he is not satisfied with India's tariffs on US products and has also withdrew trade concessions on $6.3 billion of Indian goods on June 1. Even last year, Trump targeted India’s tariff regime, tweeting that it is no longer acceptable. “India has long had a field day putting tariffs on American products. No longer acceptable!” he tweeted. Trump administration wants India to remove price restrictions on medical equipment and labelling restrictions on dairy products. It also wants India to lower duties on smartphones and other IT and telecom products.