India Manufacturing Gains Amidst US-China Trade War
BUSINESS ECONOMICS|August 1-15, 2019

Due to the escalating trade war between the US and China, several American companies are planning to shift their supply chain from China to avoid any tariff backlash. India appears to be the potential benefactor in this case.

Aritra Mitra

Tanmoyee Bannerjee, Professor, Department of Economics, Jadavpur University, said to BE, “From February onwards, the US has imposed very high tariffs on the products of China, namely, 10% on steel and 25% on aluminium. This is not going to affect only the Chinese or the US economy but other economies as well. There are some countries like India, Vietnam, Taiwan who are going to get some benefits due to this policy.”

However, even before the trade war started in 2018, several top brands like Nokia, Adidas, Delta Electronics, and Samsung had already began to shift their manufacturing base to reduce the cost and diversify their supply chain. The trade war has only accelerated the process. The US-India Strategic and Partnership Forum (USISPF), a US-based advocacy group in a recent media interview said that it has been discussing plans to move outside China with as many as 200 American companies and help them to set up an alternative base in India.

India as a rising manufacturing destination

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