Trump’s Trade War A Windfall For India’s Manufacturers?

The intensifying trade war between the U.S. and China could open the door for India to increase its exports to both countries, the Confederation of Indian Industry said on Sunday.

The group, which represents India’s manufacturers, identified a number sectors that could benefit, including electrical equipment, vehicles, aviation parts and medical diagnostic equipment. “India can focus on numerous goods for expanding its exports to the U.S. and China markets following the hike in duties by both countries in imports from each other,” the CII said, in a statement.

U.S. president Donald Trump’s administration has levied a 25% tariff on Chinese goods with a total trade value of more than $34 billion. Trump has threatened to impose tariffs on an additional $200 billion in Chinese imports. China, under leader Xi Jinping, has responded with a series of countermeasures, including a 25% tariff on automobiles and agricultural and aquatic products.

India’s exports to the U.S. in 2016 totaled $72 billion, while its exports to China were about $16 billion in 2017, according to the most recently available data.

CII said those numbers could grow as goods shipped between China and the U.S. become more expensive for businesses and consumers to buy due to the rise in tariffs. It added that the Sino-U.S. trade war could also boost Indian manufacturers whose goods currently have little presence in those country’s markets. “Sectors like apparel and textiles, footwear, toys and games and cell phone manufacturing are becoming competitive industries in India and need to be encouraged,” the group said.

India’s nascent cell phone manufacturing market includes upstarts such as Spice Digital and Reliance Jio, which recently released a 4G feature phone that includes Google Assistant.

While Indian exporters could see increased demand for their products, some are also wary about signs of increasing trade tensions between the U.S. and India. In June, India responded to the White House’s global tariff hikes on steel and aluminum by raising duties on U.S. metal and agricultural products.

The Sensex rose 391 points Friday, to close at 37,556.16, and is expected to enjoy another strong week as several major companies are set to report positive earnings.

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