The US, China flags.
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The latest trade truce between China and the United States has raised questions as to how it will affect India.
In Geneva, last month, both US and China agreed on a framework to put their trade truce back on track.
Despite reaching an agreement to temporarily walk back much of their triple-digit tariffs after trade talks in Geneva in May, the world's two largest economies were still at odds again over a raft of export controls that had throttled each other's key supply chain.
What do these changes mean for India?
The US had previously imposed a 26 per cent tariff on India goods which is significantly lower than its Chinese counterpart. That gives India an edge. Post the 90-day truce, the gaps have reduced leading to stiffer competition for the Indian exporters, from China.
India has actively presented itself as a viable alternative to Chinese manufacturers and exporters.
However, India’s advanced battery technology manufacturing industries remain unaffected due to its duty-free status.
Apple, one of the world's most prominent tech company’s is already actively looking to assemble more iPhones in the coming years.
The US had imposed a high tariff on Chinese Electric Vehicles, which opens a window for Indian manufacturers, especially beneficial due to the Production Linked Incentive (PLI) schemes established by the government to boost Indian domestic goods in the global market.
The temporary truce contributes to the stability of the global supply chain thus allowing multinational companies to consider India as a viable option to set up long-term goals. This period hints at India's appeal as a destination for global investment.
China’s tariff concessions on US agricultural and medical produce may lead to redirection of its export market. US agricultural exports face stiff competition from Brazil, which accounts for 70 per cent of China's imports.
China may consider redirecting this import to countries other than the US simultaneously deviating their own exports. India can seize this opportunity by strengthening its agri-tech and pharmaceutical industries.
(With Agency inputs)