In the trade war, India only the Asian nation increases export share
NEW DELHI: The only major Asian economy that has increased its share of exports since the beginning of the tariff wars in 2018 is the one with the least trade ties with China.
India's share of world exports increased to 1.71% in the first quarter of 2019 from 1.58% in the fourth quarter of 2017, according to data collected by Bloomberg. The participation of all other economies among the 10 largest exporting nations in Asia fell in the same period.
Part of the reason for India's superior performance is that it is not as integrated into global manufacturing supply chains as its peers, which means that exporters are protected from growing trade tensions in the region.
It is a feeling marked by the governor of the Reserve Bank of India (RBI) Shaktikanta Das in a recent interview.
India is not part of the global value chain, he said. Thus, trade tension between the United States and China does not affect India as much as other economies.
China is the largest buyer of goods from South Korea and Japan, whose share of world exports has declined more in Asia. For India, China is the third largest market, after the US. UU. And United Arab Emirates.
Our biggest advantage is that our product basket and our market basket are quite diversified, said Rakesh Mohan Joshi, a professor at the Indian Institute of Foreign Trade in Delhi.
Trade tensions between the United States and China have given India the opportunity to increase exports to both countries, according to Ajay Sahai, CEO and executive director of the Federation of Export Organizations of India.
India's exports to the US UU. They grew at the fastest pace in six years in the year ending March 2018, while exports to China increased by 31%, the second highest annual growth rate in more than a decade, according to data from the Ministry of Commerce .
China is more willing to give India access to the market than ever before, Sahai said, signaling greater access for products such as rice, fruits and vegetables, with potential for greater exports of pharmaceuticals and car components to China.
On the other hand, Indian exports to the USA. UU. They could lose momentum. The president of the United States, Donald Trump, criticized India for its tariffs on US products and withdrew trade concessions of $ 6.3 billion of Indian products on June 1. India responded with higher tariffs on some 30 US products.
India's relative immunity against trade tensions could be coming to an end. Exports fell 9.7% in June compared to the previous year, the largest decline in more than three years.