US-China Trade Tensions: Recently, the slowdown in the ongoing tariff war between America and China has definitely given some relief to the global economy, but its impact is being seen negatively on India’s electronics sector. The reduction in trade tensions between the two countries after the meeting of the US and Chinese Presidents in Busan was described as a ‘success’, but this development has raised concerns for India’s electronics industry.

Impact of US-China agreement

After the reduction in the tariff (import duty) imposed by America on goods imported from China, Indian electronics companies have expressed the fear of lagging behind in competition. The industry says that this may weaken their hold in the American market, because now Chinese products will reach there at a cheaper rate. For this reason, Indian industry has appealed to the government to take supportive policy steps to reduce this potential impact.

After the meeting between US President Vladimir Putin and Chinese President Xi Jinping on October 30, the US reduced the fentanyl tariff imposed on China from 20 percent to 10 percent. According to the report of Economic Times, due to this step the competitive advantage that India was getting till now has reduced significantly.

ICEA’s concern

India Cellular and Electronics Association (ICEA) said in a letter to the government on November 6 that the cut in US tariffs on Chinese goods could lead to a decline of about 10 percent in the profits of Indian electronics companies. ICEA represents the country’s major electronics companies — Apple, Google, Motorola, Foxconn, Vivo, Oppo, Lava, Dixon, Flex and Tata Electronics.

This situation is also important because the electronics sector has been prominent among the sectors of India which have made the fastest progress under the ‘Make in India’ initiative. This new challenge arising from the trade agreement between America and China could threaten to slow down India’s success.

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India US Trade Talks: This can be a relief news for India. The long wait for a trade deal between India and America, which is facing high American tariffs, may now end soon. mint According to the report, the American tariff imposed on Indian goods can be reduced by 15 to 16 percent. At present, about 50 percent US duty is being imposed on goods imported from India.

According to the report, the main focus of the proposed agreement between America and India is on energy and agriculture sectors. Also, Washington, which is trying to reduce global dependence on oil supplies from Russia, is trying to get India to gradually reduce its purchases of oil from Moscow. Discussion is also going on on this issue.

India-America trade deal in final round

The talks between the two countries mainly focus on increasing mutual cooperation in the energy and agriculture sectors. Both these areas were at the center of attention in earlier talks also. mint Quoting officials related to the matter, it has been said that the talks have now reached the final stage and an agreement can be reached before the ASEAN summit to be held at the end of this month. Along with this, there is also a possibility of a formal announcement.

However, neither the Indian Commerce Ministry nor the White House has given any official response in this regard so far.

Emphasis on agriculture and energy

Under the agreement, India may allow increased imports of some American agricultural products — such as non-genetically modified corn and soymeal. This may put an end to the long running dispute regarding access of American products to the Indian agricultural market.

In return, the US tariff rates imposed on Indian goods can be reduced by about 15 to 16 percent. This cut will make Indian products, especially textiles, medicines and engineering goods, more competitive in the US market.

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