New Delhi: US President-elect Donald Trump’s announcement to impose high tariffs on three of its trading partners, including China, will provide huge export opportunities for India and the domestic industry should prepare itself to tap them, Niti Aayog CEO BVR Subrahmanyam said Wednesday.He also said that the India-US relationship is “very deep” and “multi-dimensional” It is very deep and does not stand only on one leg which is trade.Trump last week said he would slap 25% tariffs on imports from Mexico and Canada and an additional 10% on China.“Whatever Trump has announced so far…I think there are opportunities for India. We are (like) a man at first slip, the ball is coming in our direction. Are we going to hold it or drop the catch, it’s for us to see…and I think, you will see some steps in next few months,” Subrahmanyam said while releasing the first of the Aayog’s Trade Watch Quarterly report.ALSO READ: India has miles to cover before cashing in on China’s big loss Noting that there are going to be huge disruptions because of that in the US trade, which would open up “huge” opportunities for India, he said: “The question is if we actually prepare ourselves, it can lead to a massive boom… because there is going to be trade diversion”.The US is India’s second largest trading partner with $47.3 billion of goods exports in April-October FY25 and $26 billion of imports. The US’ imports from India rose 10.48% compound annual growth rate (CAGR) between 2001-23 as against its imports from the world at 4.76%.“Our relationship with the US is multi-dimensional. It is very deep. It’s not standing only on one leg which is trade. There are many other dimensions. The two nations have a much deeper relationship and all these things will be taken into account,” Subrahmanyam said.At the same event, NITI Aayog vice chairperson Suman Bery said that one should not be “obsessed with” trade deficits as an economy gains more from imports.ALSO READ: India’s true manufacturing rival is not China, it’s someone else Emphasising that trade is not only about exports but also imports, Bery said: “Because we have a floating exchange rate, we structurally will have a trade deficit and because we want to invest, we will structurally have a current account of deficit….these are goods not bads.”He cautioned that India has to walk a very careful line about “not closing of imports to the point where we are cultivating local monopolies”.ALSO READ: India to carefully monitor Trump’s policies on China & IranChina+1: Limited successAs per the Trade Watch Quarterly report (April-June FY25), India has seen limited success so far in capturing the ‘China Plus One strategy’, while Vietnam, Thailand, Cambodia, and Malaysia have become bigger beneficiaries.It said that factors such as cheaper labour, simplified tax laws, lower tariffs and pro-activeness in signing Free Trade Agreements (FTAs) have played a critical role in helping these countries expand their export shares.The US has imposed stricter export controls and higher tariffs on Chinese goods to limit China’s growth and expenditure towards technological progress which led to a fragmentation of global supply chains, prompting multinational corporations to seek alternatives to Chinese manufacturing.“India has to navigate the disruptions in the global supply chain, and be wary of China dumping its products in Indian markets,” the Aayog said, adding that India is seen as an attractive destination for companies looking to shift their manufacturing bases out of China.India’s share in global trade has fallen for labour-intensive sectors despite significant endowment and China is the main competitor in several key product categories highlighting the need for India to enhance competitiveness in these products, it highlighted.CBAM concernsFor India, the iron and steel industry, representing 23.5% of its EU exports, faces the highest exposure under the Carbon Border Adjustment Mechanism (CBAM)“Indian firms may incur tariffs of 20-35%, leading to higher costs, reduced competitiveness, and lower demand in the EU market,” Niti Aayog said, noting that additionally, compliance costs will rise due to the need for detailed emissionsreporting.CBAM will come into effect January 1, 2026 wherein domestic companies from seven carbon-intensive sectors including steel, cement, fertiliser, aluminium, and hydrocarbon products would have to seek certificates from the EU authorities to comply with the CBAM norms.Nominations for ET MSME Awards are now open. The last day to apply is December 15, 2024. Click here to submit your entry for any one or more of the 22 categories and stand a chance to win a prestigious award.
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