India may become winner in US-China trade war

19 Sep, 2019 09:03

The Indian economy could benefit by $11 billion as some international manufacturers move production to the country due to trade tensions between Washington and Beijing.

That’s according to a report from Singapore’s DBS Bank. It said that ″India could increase its trade footprint in [the] midst of the US-China trade conflict, particularly under categories on which US has imposed tariffs on China.”

The bank’s economist, Radhika Rao, told CNBC: “Apart from trade, diversion in investment flows is an opportunity that India could benefit from, as manufacturers seek alternative origination destinations.”

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According to Rao, the top three sectors in India that could benefit from the trade war are pharmaceutical, chemicals, and engineering. She noted that the South Asian country is already competitive in those industries globally and will likely be well-placed to meet further demand.

A report from the India Brand Equity Foundation (IBEF) showed that the nation’s pharmaceutical industry supplies over half the world’s vaccine demand, and 25 percent of medicines in the United Kingdom. The country also exports more than 60 percent of its engineering goods to the United States and Europe.

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Experts point out two key challenges that businesses face in India, such as land laws and labor regulations. Among the major hurdles for manufacturing, they mentioned lack of proper infrastructure.

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