India is unlikely to be directly affected by the recent US-China trade deal signed as the country gained little from the almost two-year old trade war between the two trading giants. But, if the hard-negotiated pact goes beyond the first phase and is implemented in spirit by both nations, India could benefit from an overall improvement in sentiments and performance of world trade. However, there are some, who argue that India seems to lack the competitive strength to take advantage of a global turnaround.
Moreover, as per the pact, tariffs on $120 billion worth of goods would be halved, but much of the higher duties on about $360 billion of Chinese exports to the US and more than $100 billion of US exports to China would stay. China has also committed to increase its purchases in manufacturing, services, agriculture and energy from 2017 levels by $200 billion over two years and that could include $ 50 billion worth of agricultural goods a year. But that should also not be a reason for worry for India’s exporters. India and China have been in talks since the trade war started for increased purchases by Beijing of commodities such as soybean which it had been mostly buying from the US. But it did not actually result in much increase in exports from India. So, a resumption of farm goods purchases by China from the US is not likely to hurt India.