Impact of US CHINA Trade War on India?
For India , a significant shift in the manufacturing sector is awaited and this could be a golden opportunity for India, especially if it is properly positioned. Although if the tension persists for long, then there could be a slowdown in the economic too.
How India can take advantage from this Trade War?
There could be a short-term impact on the stock markets. The benchmark Sensex at the Bombay Stock Exchange has been falling in line with global markets that have been spooked by the escalating trade war between the US and China.
Theoretically, in areas like readymade garments, we can push forward but will have to compete with Bangladesh, Vietnam in particular. At the margin, there can be some gains. However, India, too, has been in the radar of the US for unfair trade and the GSP status is already to be withdrawn soon. Given our clout in the world economy, we may have to review our policies and practices.
In the longer run, while a slowdown in the US economy does not augur well for emerging markets, the trade war could have a silver lining for some countries. India is among a handful of economies that stand to benefit from the trade tensions between the world’s top two economies, the United Nations has said in a report.
The repercussions can be more volatility in both commodity prices and currencies as the trade war escalates. While a non-retaliatory situation would make the dollar stronger and pressurize the rupee, the continuation of the war can cause volatility. Global trade will get more volatile and also affect investment flows which are otherwise not part of the deal which can be more serious.
Other countries set to benefit from the trade tensions include Vietnam, with 5% export gains, Australia (4.6%), Brazil (3.8%), India (3.5%), and Philippines (3.2%), the UNCTAD study said.
Comments
Post a Comment