Modi government is responding well to the rising trade tensions between the world’s two largest economies, maintaining a stance that serves the cause of Indian exporters best, realising how critical exports are for the country’s big macro picture, EEPC India said on Tuesday.
EEPC India, representing engineering exports which account for about one-fourth of the country’s total merchandise exports, said it would work with the government in identifying new opportunities which are emerging out of the unveiling new global trade paradigm, marked by tariff war between the US and China.
“There are both opportunities and challenges, both for us. We can increase our engagement with the US as also China, seeking to occupy the markets which would be vacated in the midst of the ongoing mutual tariff increases by both the top two economies,” EEPC India chairman Mr Ravi Sehgal said.
He said with pressure on the rupee in the wake of hardening of crude oil prices, bridging the trade deficit is of great significance for India’s overall current account deficit. “The best way forward for bridging the gap is to raise exports, moving with a definite strategy. While the Commerce Ministry has already begun exercise on this strategy, we in the engineering sector would extend our full support , in terms of sharing key inputs and market intelligence from across different territories , mainly the US where the opportunities are galore in the backdrop of robust growth and vacation of space by the high tariff wall for the Chinese goods,” Mr Sehgal said.
He said, the focus should be on value addition and increasing the competitiveness of exporters, which can be achieved by straightening some of the procedural issues for tax refunds, customs clearances. “Besides, arresting cost of raw material like steel would be of importance. Exporters, especially in the manufacturing, need to keep their costs in check by getting raw material at the globally competitive prices while logistics support is also important”.
The EEPC India said, “there should be both medium-to-long-term strategies as also the short-term game plan”. The first and immediate focus should be on the short-term plan in the wake of the global tariff war, which is not abating any time soon.
Emphasis on exports would not only improve India’s current account deficit but would also create jobs, particularly in the small and medium enterprises engaged in the export sector