Time to push back: On India and the continuing U.S. pressure
The U.S. has accused India of enabling the evasion of Chinese tariffs by importing Chinese goods for minor assembly before re-exporting them. The article argues that India should resist U.S. pressure to change its trade policies, as these imports are vital to India's domestic manufacturing growth.
Why it matters
This reflects the growing trade tensions between India and the U.S. and the complexities of India's 'Make in India' manufacturing strategy.
The latest accusation levelled by the United States against India has the potential to be the most harmful to the Indian economy. A recent White House report, naming around 40 countries in all, has said that India ranks among the top ‘enablers’ of China’s evasion of U.S. tariffs. The accusation is that India and these other countries are importing Chinese goods, making minor modifications to them, and then exporting them to the U.S. at lower tariffs than what Chinese goods would have faced. The fact that Chinese imports form a significant pillar of Indian manufacturing is no secret. Yet, the nature of these imports is slowly changing. India is gradually moving away from importing finished products, making cosmetic changes, and selling them. Instead, the share of intermediate goods in Indian imports from China has been steadily rising.
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