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India should focus on new categories such as machinery, vehicles and transport parts for export to the US where it has a competitive advantage in the US-China trade war, according to a report. The report ‘New Export Opportunities for India in Trade with US and China’ by the Confederation of Indian Industry (CII), states that with the US imposing additional duty of 25 per cent on imports worth $34 billion from China, certain Indian products may become more competitive.
Between 2012 and 2017, China’s exports to the US have moved up the value chain with accelerated growth in high-technology items such as telecommunications equipment, automotive and cell phones. The US has raised tariffs for 818 product lines for imports from China. Considering this, the report suggested that products such as intermediate parts for the defence and aerospace sector, vehicles, and auto parts and engineering goods have a higher export potential. The report suggests that the trade dialogue with the US should be strategised taking into account India’s competitive advantage in these products.
FDIs from the US should be encouraged by boosting confidence of the US companies in India’s business climate. This might necessitate addressing their concerns regarding non-tariff barriers in India for better outcomes in the long term, the report stated.
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