Priyanka Tiwari
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With increasing trade conflicts between China and the US, India is proactively trying to market itself as a favorable alterantive to US manufacturers. In China, there has been a surge in operational costs due to tariff hikes, some exceeding 245%. In response, India is reaching out hoping to capture investment and operational relocations from companies considering moving out of China.
To complement this policy, the Indian government is now actively motivating local businesses to pursue new export markets within the US. As part of devising a strategy to mitigate global trade volatility, government consultations with industry leaders actively sought to devise plans to maximize favorable outcomes.
Focused Approach to Key Sectors
Importantly, India understands there are the 10 to 12 sectors it can aim to gain market share more profitably than in others. These include:
Electronics
Pharmaceuticals
Chemicals
Automobiles
Toys
Air conditioners and home appliances
Additionally, with the goal of transforming India into a core global manufacturing hub, these sectors have been identified as needing investment and and policy aid to increse the domestic manufacturing capabilities.
Bilateral Trade Agreement is Now Under Negotiation
And, in an effort to bolster its trade relations with the US, India is working towards a bilateral trade agreement to address India's growing trade opportunities. Experts project, for Indian exporters, this type of agreement would provide a more dependable and profitable trade option relative to other countries.
Industry experts have emphasized the importance of acting rapidly.
As noted, if there is a delay from India's side, then countries, especially Vietnam, could capture most of the manufacturing business moving out of China from the electronics and semiconductor businesses.
Electronics Remain a Priority
Temporary Trump’s tariff cuts for smartphones and computers were only a part of the electronic war, as we know the electronics supply chain is going through major reconstruction. Indian companies view this as a prime moment to strategically boost their electronics market presence. Worries linger, however, on what will happen with other tariffs that may be imposed on the imports of semiconductors.
