Trade war- China and the United States
After the trade conflict between the US and China, India has started to export more products to China than to the United States. State Bank of India commented that the overall export to China has been more in recent months especially after the US and China conflict. Group Chief Economic Adviser of SBI Soumya Kanti Ghosh commented that the US and China have imposed certain prices on each other for various products and it has become a plus point for India. India has gained by acquiring such markets.
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How China and the USA have changed their import/export pattern?
For example, the USA was importing textiles from China and now they are acquired from other South Asia countries. India has seen a great gain in the early months of 2019. And also, Bangladesh and Vietnam have seen an exceptional increase in textile exports to the USA since 2019.
China has stopped acquiring cotton from the USA at the start of 2019. They have started to obtain from other countries like India, Australia, and Brazil. Their import from other countries has gradually increased to date.
How India benefits due to the USA- China trade war?
India has largely benefited in the USA- China trade conflict by exporting more products to China such as fish, inorganic chemicals, cotton, and plastic. Ghosh added that India has seen an excellent profit in most of these commodities.
To improve imports, easy access to credit plays an important part. Some measures comprising allowance of interest equalization plan to all the groups of exporters and complete digital transformation of the export procedure would help in a great way for India’s export credit growth.
Ghosh also added that loans scheduled for Small and Micro Enterprises under the Credit Guarantee Fund Policy can be offered for MSME sector- export-oriented units with a close of INR 5 Crore. The annual guarantee fee can be reduced.
The State Bank of India has suggested making use of the Export Refinance Scheme. It is re-launched by the RBI (Reserve Bank of India) in foreign currency and INR.
ECGC (Export Credit Guarantee Corporation of India) impaneled CIB (Credit Information Bureau) may offer opinion data on real-time sources on entities abroad.
