The enmity between America and China is not hidden from the world. Trade war has been going on between the two for a long time. To take advantage of this, along with other countries, India has also worked to promote its manufacturing sector.
But, according to the information that has now come to light, India has got a slight benefit from the decline in China’s share in American trade. Other Asian countries have benefited more from this trade war than India.
Tension between America and China
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An Oxford Economics study claims that between 2017 and 2023, India’s total share in US imports increased by 0.6 percentage points to 2.7 percent, while China’s share during this period decreased by about 8 percent to less than 14 percent. Remained. That is, whatever loss China has suffered, India has got only a minor benefit.
Vietnam has got the biggest benefit from trade diversion. Its total share in American imports increased by 1.7 percent to 3.7 percent during this period. Taiwan and South Korea have also outperformed India by increasing their share in US imports by 1 percent and 0.7 percent respectively.
It has become clear from this study that the manufacturing sector of the country will still have to do a lot of work to increase its strength. It is a matter of concern that the share of the country’s manufacturing sector in GDP has remained stable at 17 percent for more than a decade.
India’s big trade with China
Research has said that even if Donald Trump becomes the President of America and imposes 60 percent tariff on Chinese goods, India may find it difficult to increase its share in this market.
According to Oxford Economics, India’s export strength lies in the areas of the old economy, where growth prospects are limited and competition is fierce. India has made considerable progress in promoting electronic exports to America. But, import of parts from China has also increased, which shows that there has been very little value addition in domestic manufacturing.
According to Oxford, in 2023, about one-third of India’s imports of electronics, machinery, chemicals and pharma were from China. Due to instruments like semiconductors, 67 percent of India’s imports came from China. It said that despite low FDI inflows into China, India has not been able to attract a large share of global foreign direct investment.
