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US-China trade war: India may become surprise victim, predicts Rabobank

Besides a possible trade war, a faster-than-expected tightening of US monetary policy will lead to capital outflows

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FILE PHOTO: US President Donald Trump and China's President Xi Jinping shake hands after making joint statements at the Great Hall of the People in Beijing, China | Reuters photo

Anirban Nag | Bloomberg

Last Updated : Apr 18 2018 | 11:45 AM IST

India’s economy will be hit hard by a combination of a global tariff war and the U.S. Federal Reserve’s monetary tightening cycle, according to a study by economists at Rabobank International.

A tariff war will reduce exports and lead to imported inflation, which will hurt Indian purchasing power and investments, according to the Rabobank study. That could mean as much as 2.3 percent of missed GDP growth for India by 2022.

“Many countries could end up being caught in the middle,” economists Hugo Erken, Raphie Hayat and Marijn Heijmerikx wrote about the current trade spat between the U.S. and China. “India could

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