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US-China Trade War—What in Store for India

Author : Odisha Today Bureau | Posted on: 2019-01-14

Recently the US government has imposed a 10% duty on $200 billion worth of Chinese imports. This was on top of tariffs that the Trump administration has already imposed on $50 billion worth of Chinese goods in August 2018. Hence the move has sparked fears of a trade war between the two countries as China is expected not to keep silent and will definitely retaliate in kind. 

As a consequence of this trade war and other palpable tensions, the World Trade Organisation (WTO) was forced to reduce its estimate for the growth in global trade for the year 2018 from 4.4% to 3.9%. The most worrisome part of this uncalled for situation is that the WTO has further predicted a decline in trade growth to 3.7% in the year 2019. A reduction in world trade is not only going to hurt the global economy, but also it could be harmful for developing countries, which rely on export-led growth. 


Interestingly, it has created a higher possibility for India to go full-opportunist by using this trade war to increase its exports to China, said Finance Minister Mr. Arun Jaitly. Both US and India export a number of similar items to China such as fruits, lubricants and chemicals etc. Ministry of Commerce and Industry is also reported to be assessing a plan to boost its exports to the US following the imposition of tariffs on Chinese goods. It is currently said to be in talks with business groups in the chemicals, pharmaceuticals and electrical equipment space to identify items that can receive a greater trade push in the US market. 

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