India loses to rivals as US diverts trade from China, study says
US-China trade war have fallen short, according to a new study, with other Asian rivals benefiting to a much greater extent from escalating tensions between the world’s biggest economies.
Between 2017 and 2023, India’s total share in US imports rose by 0.6 percentage points to 2.7% while mainland China’s portion dropped by around 8 percentage points to under 14%, according to Oxford Economics. The biggest beneficiary from the trade diversion in the region has been Vietnam, whose total share in US imports grew by 1.7 percentage points to 3.7% in the period.
Taiwan and South Korea have also made greater strides than India, increasing their share of US imports by 1 percentage point and 0.7 percentage points, respectively, according to Oxford.
The study underscores the uphill task facing Prime Minister Narendra Modi as he attempts to boost the country’s lagging manufacturing sector, whose share of gross domestic product has remained broadly stagnant at 17% for over a decade. The research also implies that India may struggle to make significant gains if Donald Trump returns as US president and follows through with a threat to impose a 60% tariff on Chinese goods.
“The US-China trade war so far has improved India’s export prospects only to a limited extent, dashing hopes that an escalation of the conflict could boost the lagging manufacturing sector,” Alexandra Hermann, an economist at Oxford Economics wrote in a note. “India’s export strengths largely lie in sectors of the ‘old economy’, where growth potential is
