New Delhi, May 12 -- The recent US-China trade deal has significantly reduced the tariff gap between India and China, potentially impacting India's competitive edge in attracting companies looking to relocate from China.

According to Ajay Srivastava, Founder of the Global Trade Research Initiative, the US-China agreement to withdraw reciprocal tariffs for 90 days has brought tariffs closer to parity, undermining the "China Plus One" strategy that benefited India.

The 'China Plus One strategy typically involves companies diversifying their investments to countries other than China.

"Now, that edge has narrowed dramatically, with the US and China easing tensions and bringing tariffs closer to parity," Srivastava said in a note.

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