{"id":43867,"date":"2025-11-08T12:31:00","date_gmt":"2025-11-08T07:01:00","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=43867"},"modified":"2025-11-10T11:19:50","modified_gmt":"2025-11-10T05:49:50","slug":"indias-trade-opportunities-amidst-global-shifts","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/indias-trade-opportunities-amidst-global-shifts\/","title":{"rendered":"India&#8217;s Trade Opportunities Amidst Global Shifts"},"content":{"rendered":"<h2><strong>What\u2019s in today\u2019s article?<\/strong><\/h2>\n<ul>\n<li>Why in News?<\/li>\n<li>Key Findings of the NITI Aayog\u2019s Trade Watch Report<\/li>\n<li>Geopolitical Shifts and India&#8217;s Opportunities<\/li>\n<li>Sectoral Challenges and Policy Considerations for India<\/li>\n<li>Recent Developments in India\u2019s Trade Policy<\/li>\n<li>Future Prospects<\/li>\n<li>Conclusion<\/li>\n<\/ul>\n<h2><strong>Why in News?<\/strong><\/h2>\n<ul>\n<li>India&#8217;s trade landscape is undergoing significant challenges and opportunities due to global economic disruptions and evolving geopolitical tensions.<\/li>\n<li>The recently released <strong>Trade Watch report by NITI Aayog<\/strong> provides insights into India&#8217;s trade prospects, challenges, and potential growth areas, <strong>particularly amidst the US-China trade conflict and the &#8216;China Plus One&#8217; strategy.<\/strong><\/li>\n<\/ul>\n<h2><strong>Key Findings of the NITI Aayog\u2019s Trade Watch Report:<\/strong><\/h2>\n<ul>\n<li><strong>Limited success in the \u2018China Plus One\u2019 strategy:<\/strong>\n<ul>\n<li>India has had &#8220;limited success&#8221; in leveraging the &#8216;China Plus One&#8217; strategy, where <strong>multinational companies diversify supply chains away from China.<\/strong><\/li>\n<li>Southeast Asian nations like <strong>Vietnam, Thailand, Malaysia, and Cambodia have outpaced India <\/strong>due to factors such as<strong> cheaper labour, simplified tax laws, lower tariffs, and proactive Free Trade Agreements (FTAs)<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Trade fragmentation and export control measures:<\/strong>\n<ul>\n<li><strong>The US has imposed strict export controls on Chinese goods<\/strong>, further fragmenting global trade.<\/li>\n<li><strong>India\u2019s key competitors in exports<\/strong> include Malaysia and Thailand, particularly in sectors like electrical machinery.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><strong>Geopolitical Shifts and India&#8217;s Opportunities:<\/strong><\/h2>\n<ul>\n<li><strong>US-China trade conflict &#8211; A double-edged sword:<\/strong>\n<ul>\n<li>The escalating US-China trade war, marked by tit-for-tat trade restrictions, offers opportunities for India.\n<ul>\n<li><strong>US measures: <\/strong>Restrictions on exports of high-tech materials to China.<\/li>\n<li><strong>China\u2019s response:<\/strong> Bans on critical materials like gallium and germanium.<\/li>\n<\/ul>\n<\/li>\n<li><strong>India has a minimal share<\/strong> (less than 1%) in 70% of global trade, underscoring untapped potential.<\/li>\n<li><a href=\"https:\/\/vajiramandravi.com\/upsc-exam\/niti-aayog\/\" target=\"_blank\" rel=\"noopener noreferrer\" target=\"_blank\"><strong>NITI Aayog <\/strong><\/a>CEO B.V.R. Subrahmanyam emphasised a significant trade boom is possible<strong> if India capitalises on these disruptions.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>India-US trade relations: <\/strong>The US, <strong>India&#8217;s largest trading partner<\/strong>, presents immense opportunities for growth in goods and services trade.<\/li>\n<\/ul>\n<h2><strong>Sectoral Challenges and Policy Considerations for India:<\/strong><\/h2>\n<ul>\n<li><strong>Iron and steel industry vulnerabilities:<\/strong>\n<ul>\n<li>India&#8217;s iron and steel <strong>exports saw a sharp 33% decline in Q1 FY25<\/strong>, driven by weak domestic demand and oversupply in China.<\/li>\n<li>The EU&#8217;s Carbon Border Adjustment Mechanism (<strong>CBAM<\/strong>) poses a significant challenge:\n<ul>\n<li>Tariffs of 20\u201335% could reduce competitiveness and demand.<\/li>\n<li>Compliance with emissions reporting will increase costs.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><strong>Tariff policies &#8211; A balancing act:<\/strong>\n<ul>\n<li><strong>Proposed 25% hikes in steel import duties face scrutiny. <\/strong>Suman Bery, Vice Chairperson of NITI Aayog, warned about lower competition and the ramifications for domestic users.<\/li>\n<li>India\u2019s response must <strong>balance principles and pragmatism<\/strong>, especially against countries with opaque industry practices and oversupply issues.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><strong>Recent Developments in India\u2019s Trade Policy:<\/strong><\/h2>\n<ul>\n<li><strong>Interest Equalisation Scheme: <\/strong>It aims to provide identified MSME manufacturing exporters a cheaper source of rupee credit for pre-shipment and post-shipment activities to improve product competitiveness in international markets.<\/li>\n<li><strong>The Remission of Duties and Taxes on Exported Products (RoDTEP): <\/strong>It aims to neutralise taxes and duties on exported goods.<\/li>\n<li><strong>Export Promotion Capital Goods (EPCG):<\/strong> The scheme allows duty-free import of capital goods aimed at building domestic capacity.<\/li>\n<li><strong>Trade Facilitation:<\/strong> India scored 93.55% in the 2023 UNESCAP Global Survey on Digital and Sustainable Trade Facilitation (up from 90.32% in 2021), a score surpassing that of several developed countries, including France, UK, Germany, etc.<\/li>\n<li><strong>Trade Connect e-Platform: <\/strong>A single-window platform to boost international trade for Indian MSME exporters, offering real-time trade info and resources to connect with government and markets.<\/li>\n<li><strong>11th India &#8211; New Zealand Joint Trade Committee (JTC) meeting:<\/strong> Service sector trade was given a special focus, alongside streamlining regulatory and quality checks.<\/li>\n<li><strong>5th meeting of ASEAN-India Trade in Goods Agreement Joint Committee: <\/strong>The meeting reviewed issues like market access, rules of origin, trade remedies, etc.<\/li>\n<\/ul>\n<h2><strong>Future Prospects:<\/strong><\/h2>\n<ul>\n<li><strong>Impact of Trump\u2019s trade policies:<\/strong>\n<ul>\n<li>The general US tariffs on imports (e.g., 10%) would not harm India.<\/li>\n<li>High tariffs on Chinese goods (e.g., 60%) could open significant market opportunities for Indian exporters.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Focus on diversification and market expansion:<\/strong>\n<ul>\n<li>India needs to explore new markets and products to increase its global trade share.<\/li>\n<li>Proactive policy measures and reforms could position India as a neutral, connecting economy amid ongoing geopolitical tensions.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><strong>Conclusion:<\/strong><\/h2>\n<ul>\n<li><strong>India stands at a crossroads of opportunity and challenge in global trade<\/strong>. While competitors have seized advantages under the \u2018China Plus One\u2019 strategy, India&#8217;s potential remains untapped in several sectors.<\/li>\n<li><strong>Strategic preparation, diversification of trade partners, and reforms in policy and infrastructure<\/strong> could enable India to capitalize on emerging opportunities amidst global disruptions.<\/li>\n<\/ul>\n<hr \/>\n<h3><strong>Q.1. What is the &#8216;China Plus One&#8217; strategy?<\/strong><\/h3>\n<p>The China Plus One strategy is a business tactic where companies diversify their production and supply chains away from China. This strategy is a response to the risks of relying too much on a single country, especially in the face of geopolitical tensions and supply chain disruptions.<\/p>\n<h3><strong>Q.2. What is the trade imbalance between the US and India?<\/strong><\/h3>\n<p>India&#8217;s trade with the U.S. and China reached $120 billion and $118 billion respectively in fiscal 2024, doubling over the last decade. However, India has a $35.3 billion trade surplus with the U.S., while it faces an $85.1 billion trade deficit with China.<\/p>\n<p><strong>News:<\/strong> <a href=\"https:\/\/indianexpress.com\/article\/business\/india-limited-success-china-plus-one-opportunity-niti-aayog-9706290\/\" target=\"_blank\" rel=\"nofollow noopener\">India had \u2018limited success\u2019 in capturing \u2018China Plus One\u2019 opportunity: NITI Aayog<\/a> | <a href=\"https:\/\/www.niti.gov.in\/sites\/default\/files\/2024-12\/Trade-Watch.pdf\" target=\"_blank\" rel=\"nofollow noopener\">NITI Aayog<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Trade Watch report by NITI Aayog provides insights into India&#8217;s trade prospects, particularly amidst the US-China trade conflict and the &#8216;China Plus One&#8217; strategy<\/p>\n","protected":false},"author":5,"featured_media":43868,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-43867","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/43867","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=43867"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/43867\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/43868"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=43867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=43867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=43867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}