The decision of the US to increase tariffs on a number of Chinese items indicates that “no country is willing to put all their eggs in one basket post the Covid-19 pandemic,” said Indian government sources. India is also following a policy to ensure the country has domestic capability for manufacturing of electric vehicles (EVs), sources states, adding that India’s policy is sound and there is no need to worry.
US President Joe Biden on Tuesday announced steep tariff hikes on a number of Chinese imports including EV batteries, EVs, semiconductors, solar cells and medical equipment including face masks, medical gloves, syringes and needles.
Noting that the US is following policies by which they can lessen dependence on China, particularly in battery manufacturing, sources said that every country would like to not depend upon one country source, particularly where mobility is involved. “India is also building manufacturing capacity,” they noted.
A note by economic think tank GTRI said the raising of tariff on EVs, batteries and many other new technology items by the US may push China to dump these products in other markers including India. “It’s a moment for India’s Directorate General of Trade Remedies (DGTR) to remain vigilant,” it said.
Government sources however, said that the DGTR will look into any anti dumping issues but said these are speculative issues for now.
The GTRI paper also highlighted that the higher duties on Chinese face masks, syringes and needles, medical gloves and natural graphite creates some export opportunity for India. “This shift presents a significant opportunity for India. By ramping up production and export of these in-demand products, India could enhance its trade footprint in the US market,” it said.
However, India may not get any export advantage on remaining products like the EVs, semiconductor as India is the net importer of these products.
Meanwhile, Moody’s in a note on Wednesday said the new tariffs are another hit to supply chains as they try to manage ongoing risks and build resiliency. “Whenever tariffs are increased, regardless of the rational for doing so, the impact goes beyond cost increases to companies and consumers,” said John Donigian, Senior Director of Supply Chain Strategy at Moody’s.
In 2023, the US imported goods worth $427 billion from China and exported $148 billion.