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NITI Aayog expects India to benefit from US’s Tariff: NITI Aayog
Context
In a recent statement, NITI Aayog CEO B.V.R. Subrahmanyam highlighted the potential opportunities for India arising from U.S. President-elect Donald Trump’s proposal to impose high tariffs on Mexico, Canada, and China. This would disrupt global trade relations, creating new avenues for India’s growth in international trade.
Key Points from Subrahmanyam's Statement:
- Opportunities for India: Trump’s tariff proposals, including a 25% tariff on Mexico and Canada and a 10% tariff on Chinese imports, present huge trade opportunities for India. India must be prepared to capitalize on the incoming trade shift, leading to significant growth if the country acts strategically.
- S.-India Relationship: The U.S.-India relationship is not solely reliant on trade but is multi-dimensional, involving various other aspects of cooperation. This broader engagement would be taken into account in the face of shifting global trade dynamics.
- India's Trade Statistics and Trends:
- According to the NITI Aayog’s Trade Watch Quarterly report, in the first quarter of 2024-25, India’s exports to North America constituted 21% of total exports, with the EU following at 18.61%. While exports grew by 5.95%, imports increased by 8.40%, contributing to a growing trade imbalance. The report also noted a significant decline in exports of iron and steel, particularly due to weak domestic demand and oversupply in global markets, primarily from China.
Additional Insights from the Report:
- Declining Share in Certain Exports: India’s share in global exports of certain labour-intensive sectors, including pearls, lac, gums, resins, and leather goods, has declined since 2015. This suggests challenges in maintaining competitiveness in these sectors on the global stage.
- Growth in Services Exports: A notable positive trend highlighted in the report is India’s growing share in global services exports.
- India’s global services export share has more than doubled since 2005, reaching 4.6% in 2023.
- This includes significant contributions from IT services (10.20%) and other business services (7.16%).
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