Though, we may end up the current fiscal with a hefty import bill of USD 450 billion against exports of about USD 300 billion, almost one-fourth of this would be only on account of crude and other related items. Then, there are essential imports of plastics and fertiliser for which the country does not have an immediate domestic capacity.
However, even before the break out of the trade war, India has seen a huge jump of 21 per cent annualised rise in steel imports at USD 1.15 billion in February, 2018 and non-ferrous metals by 33 per cent at USD 1 billion. Yes, India should be watchful about a sudden jump in steel imports since we have enough domestic capacity available. Similar is the position with coal and related products for which domestic output can be and should be ramped up, '' said industry body ASSOCHAM.
US President Mr Donald Trump has signed notification slapping import tariff of 25 per cent on steel and 10 per cent on aluminium. He has also said that more items could be brought under high import tariff, triggering fears of retaliation from Europe, Japan and China. As far as India is concerned, even if "we want to retaliate we cannot do it without pain since, our imports are of essential nature".
''We cannot flex too much of our importing muscle, even if our exports face consequences of trade war and are subjected to tariff barriers', said the ASSOCHAM.
So, the best course would be to keep engaged with the major trading partners, without aligning ourselves too much into a single bloc. Wherever, our exports are affected, we must engage bilaterally and use the channel of the World Trade Organisation in a rule based manner. "However, the WTO route could be time consuming. So, the best course would be to stay bilaterally engaged".
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