US-China trade tensions must not escalate: EEPC

According to data compiled by EEPC, Indian engineering exports to the US, which is the number one destination for such goods, had gone up by over 47 per cent and to China by 76 per cent during 11 months (April-February) of the last financial year ended March 31.

‘Our stakes are quite high in the unfolding global trade tensions between the US and China. We would not like to be caught in the cross-fire,’ EEPC Chairman Ravi Sehgal said in a statement here. 

He said rising import tariffs in the wake of US presidential action on steel and aluminium as also the complaint filed against India by the US in the World Trade Organisation with regard to various export promotion schemes will be challenging issues for the export sector.

Last month, US President Donald Trump imposed import tariffs of 25 pc on steel and 10 pc on aluminium, unfolding the prospect of an all-out global trade war. 

India’s engineering exports to the USA between April-Feb 2017-18, have gone up to $21 bn, from $6.25 bn a year ago with a growth of 47.3 pc, a statement said. 

‘Though smaller in value terms, the engineering shipments to China witnessed an impressive expansion from $1.62 bn to $2.8 bn for the same period. China remains the fourth largest export destination for the Indian engineering exports. 

‘Even from the monthly perspective, the US continued to be the top most exporting destination for India’s engineering products in February 2018. Major items of exports to the US include products of iron and steel, industrial machinery, non-ferrous metals, automobiles.’ 

Assocham has said an annual trade deficit of as much as $150 billion with the US alone does not allow India room to retaliate in the event of a global trade war being unleashed by recent protectionist trends in the developed world, since the country’s imports are mostly of an essential nature. 

‘We cannot flex too much of our importing muscle, even if our exports face consequences of trade war and are subjected to tariff barriers. So, the best course would be to keep engaged with the major trading partners, without aligning ourselves too much into a single bloc,’ an Assocham statement said.