US-China trade war hits India with mixed cues
New Delhi, June 18 -- The US-China trade war is showing early signs of a realignment in global trade flows-including more Chinese exports being redirected to India, raising alarm among experts, even as India's shipments to the US surged.
China's exports to the US plummeted 34.5% year-on-year to $28.8 billion in May from $44 billion a year earlier, show data released by China's General Administration of Customs on 10 June.
This, however, was offset by China's rising exports, including to members of the Association of Southeast Asian Nations (up 15% on-year to $58.4 billion in May), and the European Union (up 12% to $49.5 billion), the data showed.As per data released by India's commerce ministry on 16 June, India's imports from China rose 21.7% to $10.32 billion in May from $8.48 billion a year earlier, driven by higher inflows of electronic goods, machinery, chemicals, and project-related equipment.
Meanwhile, India's imports from the US declined to $3.63 billion in May from $3.85 billion a year ago, while exports to the country grew 17.3% year-on-year to $8.8 billion, led by higher shipments of smartphones and electronics.
While these data sets highlight India's strategic position in an evolving global supply chain as American buyers diversify sourcing away from China, the redirection of Chinese exports to non-US markets raises fresh concerns about potential dumping and unfair trade practices in alternative markets.
The trade war between the US and China escalated after US President Donald Trump announced reciprocal tariffs in April, with particularly steep levies on Chinese imports into the country, although tensions have eased recently.
India is negotiating with the US for abilateral trade agreement, aiming to stitch a landmark deal before Trump's 9 July extended deadline for the reciprocal tariffs to take effect.
"The trade data clearly signals that global supply chains are adapting rapidly. But the shift also brings new vulnerabilities," said Ajay Srivastava, co-founder of the Global Trade Research Initiative (GTRI). "India must be vigilant against import surges from China and ensure that trade remedies are available if there is any sign of dumping."
India's overall merchandise imports fell 1.8% to $60.6 billion in May from $61.7 billion a year ago mainly due to lower shipments of oil, gold, and diamonds. Excluding these three categories, India's imports jumped 12%, rising from $36.8 billion to $41.2 billion.
This trend is also visible in tax collections. India's earnings from Integrated GST (IGST) on imports jumped 72.9% to Rs.42,370 crore in May from Rs.24,510 crore a year earlier. Since petroleum products are not taxed under GST, this sharp increase mainly reflects a rise in imports of other goods like electronics, machinery, and industrial products.
Electronics and machinery led India's import growth in May. Electronics imports rose 27.5% to $9.1 billion, while machinery and computer-related imports jumped 22% to $5 billion....
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