"Care chief economist Madan Sabnavis has advised India to have a cautious approach at this stage as the trade war could be extended to India as well. President Donald Trump is very unpredictable, and has already indicated that Washington could levy higher tariff on some of the products imported from New Delhi. The Sino-US trade war, however, opens an opportunity to boost India’s exports to the US. India-US trade is worth over $100 billion. Both in merchandise and services, bilateral trade is loaded in favour of India. But there is also a possibility of dumping from China in the face of US restricting imports from Beijing."

The trade war between US and China, oil spike and volatility in exchange rate is likely to have a negative impact on oil importing countries like India. To mitigate this, India plans to hike tariff on 30 imported US goods including motorcycles, heavy machinery, chocolates, almonds and shrimps. This is in response to US increasing duty on aluminium and steel imported from India, resulting in a combined loss of $240 billion, which though not significant, mutes the expansion possibility.

Opportunity to boost exports

Care chief economist Madan Sabnavis has advised India to have a cautious approach at this stage as the trade war could be extended to India as well. President Donald Trump is very unpredictable, and has already indicated that Washington could levy higher tariff on some of the products imported from New Delhi. The Sino-US trade war, however, opens an opportunity to boost India’s exports to the US. India-US trade is worth over $100 billion. Both in merchandise and services, bilateral trade is loaded in favour of India. But there is also a possibility of dumping from China in the face of US restricting imports from Beijing.

New Delhi cannot remain complacent as Washington may demand enhanced market access in farm and dairy products and medical equipment. Although India’s trade surplus with the US is little over $25 billion as compared to China’s $337 billion, America reckons India as a big market for its dairy and farm products and medical equipment. India is one of the largest producers of fruits and vegetables with horticulture recording bumper harvest of 375 million tonne this year. Import of US farm products will worsen farmers and food security concerns.

A golden opportunity

Although, the US has threatened to withdraw the special and differential flexibilities for India, China and South Africa, trade experts see this as a window of opportunity for New Delhi to step up farm exports to Beijing which can help in narrowing the trade gap with China, now at over $50 billion. India can increase its global farm exports to $100 billion from the present $40 billion.

Analysts say, the trade war has certainly opened some opportunities and it is now up to the government and exporters to cash-in on it. FIEO regional head and a top garment exporter A Shaktivel said that as it is garment exports are not doing well and a trade war will definitely hit the Indian exports which of late has started looking up. India will do well to be cautious as it could be the next target. There may be a window of opportunity as well which depends on what Chinese items attract higher tariffs in the US.