The US reciprocal tariff plans may not hurt most export sectors in India as Canada, Mexico and China would face higher tariffs creating opportunities, according to Niti Aayog Programme Director Pravakar Sahoo.
“We are looking at the data at a very dis-segregated level. And these are preliminary results as our report is not final. But I can just give you the overview that we are not going to lose. This reciprocal tariff is not going to affect India, except very specific sectors, and in fact, there are opportunities to really capture,” Sahoo said on Friday speaking on the sidelines of the release of the second edition of Niti Aayog’s quarterly trade watch.
Sahoo said that the three competitors for India in the US market–China, Mexico and Canada–accounted for 50 per cent of American exports and were saddled with very high tariffs.
While Canada and Mexico are to face 25 per cent tariffs in the US, the tariffs on China would be around 20 per cent.
“If you compare our position and the post imposition tariffs of competitors.. We are much better off in the post scenario. In six out of top ten top products we will benefit,” Sahoo said.
Speaking at the event, Niti Aayog member Arvind Virmani said that after trade tensions erupted between US and China in 2017, five countries gained from that – Taiwan, Vietnam, Thailand, Mexico and India. India was fifth amongst the five countries that benefited from China’s loss and the challenge was to move the country up to the first position, he said.
Virmani suggested that free trade agreements with those countries with large shares of manufacturing, which are sources of FDI and which are the headquarters of MNCs would be beneficial for India as they can act as lead anchor investors.
“The top countries in this context are the US, EU, Japan, UK and S Korea,” he said.
When asked that the situation had changed now with not just China, but many others such as India likely to be hit by US tariffs, Virmani said that one must be focussed on the opportunities while dealing with the rest.
The US is scheduled to impose reciprocal tariffs on countries with high tariffs on April 2, but India, which is negotiating a Bilateral Trade Agreement with the country, hopes to avoid them.
