US-China trade war: Gains for Telangana exporters only in short run

Traders believe that industrial, pharma and IT-related exports from the state are likely to benefit if tension escalates.

Published: 25th June 2018 03:10 AM  |   Last Updated: 25th June 2018 03:10 AM   |  A+A-

Image used for representational purpose. (Express File Photo)

Express News Service

HYDERABAD: The ongoing US-China trade war can give only a short-term export impetus to exporters from Telangana, say those from the export sector. However, those dealing with pharmaceutical exports do not think that the trade war will impact or benefit them.

The trade war between the US and China started in the backdrop of increasing trade deficit between the USA and China. When President Donald Trump announced import tariff on Chinese steel in March, China responded with its own set of tariffs. US widened the tax net to cover Mexico, Canada, the European Union and India.

The US levied import tariff amounting to $ 241 million on steel and aluminium products from India. On June 14, India notified the World Trade Organisation of its decision to raise tariffs on 28 US goods imported into India, thereby matching the $ 241 million that the US hopes to recover from India. “We are not expecting the situation to escalate any further,” says K Unnikrishnan, deputy director-general, Federation of Indian Export Organisations.

Only aluminium and steel have been taxed so far. Our exports to the US are much lower in comparison with US exports to India,” he explained. If the tension escalates, exporters will gain but only in the short term. As of Saturday, the US threatened to impose a 25 per cent tariff on automobile imports from the EU. This is most likely to benefit agricultural products mainly from Andhra Pradesh and industrial, pharma and IT-related products from Telangana, he added.

What’s in it for Telangana?

Telangana is one of the five states that contribute 70 per cent of India’s exports. The US in 2016-17 bought from Telangana merchandise worth `10,784 crores, and a large chunk of it was pharma products, according to the Socio-economic Outlook 2017-18.

However, those from the pharmaceutical sector feel that there won’t be having any serious impact on Telangana pharma sector. “This issue won’t have any serious impact on the pharma sector in Telangana in particular and India in general,” said Uday Bhaskar, director-general, Pharmaceutical Export Promotion Council of India. “Those who are exporting to the US have already registered their products and companies, the prices of their products are negotiated and the orders placed well in advance.”

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