In a U.S.- China Trade War, Does India Benefit?

Analysts differ on their opinions on whether India stands to gain if there were to be a trade war between the U.S. and China, but the majority say India stands to benefit from the tensions.

The Economic Times reports that Seshadri Chari, a national executive member of the ruling Bharatiya Janata Party, says,”China’s production strength requires a market, and the U.S. is no longer a Chinese market. At this stage, China cannot risk a meltdown in its economy. It’s too politically risky for Xi Jinping. They need a big market. And in Asia, we are the largest market. Today, India is dealing with China from a position of strength.
 Ship in a port

“A protectionist America hurts China more than it hurts India, though India is not without concerns,” states Ashok Malik, a distinguished fellow at the Delhi-based Observer Research Foundation.

“If the U.S. and China don’t get along, the U.S. will turn increasingly to India as a large Asian actor,” says Shashi Tharoor, a lawmaker with the opposition Congress Party and chair of India’s parliamentary standing committee of foreign affairs. He added, “And China, if its U.S. market contracts, will need to diversify its markets and investment outlets, including toward India.”

It would be “premature” to assume U.S.-China ties will nosedive given the scale of their interdependence, says Ashok Kantha, a former ambassador to China and director of the Institute of Chinese Studies in New Delhi.

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Posted on by Gunjan Bagla
Gunjan Bagla
California-based management consultant Gunjan Bagla runs Amritt, a consulting firm helping American companies to succeed in India. Amritt is the trusted advisor for India market research, India business development, India market entry, Global Engineering, Global Technology Scouting, India R&D and Open Innovation. Gunjan is author of "Business in 21st Century India: How to Profit Today from Tomorrow’s Most Exciting Market" (Hachette Book Group, 2008), Amazon's top rated title on the subject. He has appeared as the India Expert on BBC Television, Bloomberg TV, Fox Cable Business and has been quoted in the New York Times, the Los Angeles Times, the Hollywood Reporter and Business Week for his expertise on India.

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