A US-China trade war, the coronavirus outbreak and US President Donald Trump’s visit to India are insisting factors for India to surpass China. Firstly, the trade war has negatively affected the trade relations between these two nations. The US has restricted imports from China through innumerable tariffs and duties. The US has been a major destination for goods manufactured in China so far. However, the share of Chinese goods going to the US has declined from 21.6 per cent in 2018 to 18.4 per cent last year. For India again, the US is a major exporting destination and India’s share in US imports jumped slightly from 2.2 per cent in 2018 to 2.3 per cent in 2019.
Secondly, the coronavirus epidemic has slowed China’s growth and restricted it as a closed economy at present. The first quarter growth rate in China could be as low as 3.5 per cent due to the epidemic (Morgan Stanley, February 19). This outbreak has hindered the global supply chain as China is a major exporter across the globe. Thirdly, Trump visit to India is a felicitous opportunity for India to improve bilateral trade between the two countries. Trump signed three memorandums of understanding during his visit. This may also encourage US firms to start manufacturing in India, smoothen matters like tariffs, visas and policy stability that impede the ease of doing business.
The discussion over 5G, a $3 billion defence deal and escalating exports of energy to India can be a boon for India to overcome from great economic slowdown and bring India on double-digit growth rate.
IIFT, New Delhi
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