Will India gain from Trump’s China tariffs?

While India dreams of becoming a new ‘factory to the world’, its manufacturers are struggling to find skilled workers, secure components and overcome red tape, write Alex Travelli and Hari Kumar from Sonipat, Haryana state

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Even when India was staring down the barrel of a 27% tariff on most of its exports to the United States, business executives and government officials saw an upside. India’s biggest economic rival, China, and its smaller competitors like Vietnam were facing even worse.

India has been pushing hard in recent years to become a manufacturing alternative to China, and it looked as if it had suddenly gained an advantage.

Then India and its smaller rivals gota 90-day reprieves, and President Trump doubled down on China, boosting its tariff to 145%.

The sky-high tax on Chinese imports to America presented “a significant opportunity for India’s trade and industry,’ said Praveen Khandelwal, a member of Parliament from the ruling party of Prime Minister Narendra Modi and a top figure in the country’s business lobby.

India, with its enormous work force, has been trying to elbow its way into China's manufacturing business for a long time, yet its factories are not ready. For the past 10 years Mr Modi has pursued a goal he named “Make in India.”

The government has paid incentives to companies producing goods in strategic sectors, budgeting over $26 billion, and tried to attract foreign investments in the name of reducing India’s dependence on Chinese imports. One ofits goals was to create 100 million new manufacturing jobs by 2022.

There have been successes. The most eye-catching one is that Foxconn, the Taiwanese contract manufacturer, has started making iPhones for Apple in India, moving some work from China.

Yet the role of manufacturing in India over a decade has shrunk, relative to services and agriculture, from 15% of the economy to less than 13%.