New Delhi: In a global trade war, India does not have much flexing power despite high imports, Assocham said on Sunday.
“So, the best course would be to keep engaged with the major trading partners, without aligning ourselves too much into a single bloc. Wherever, our exports are affected, we must engage bilaterally and use the channel of the WTO in a rule-based manner,” the body said.
However, the WTO route could be time consuming. So, the best course would be to stay bilaterally engaged, it said. “India may be running an annual trade deficit of about $150 billion, but a much higher level of imports than exports would not provide the country handle to retaliate, should the world witnesses an escalation in trade war, since most of the Indian imports are unavoidable,” it said.
“Though, we may end up the current fiscal with a hefty import bill of $450 billion against exports of about $300 billion, almost one-fourth of this would be only on account of crude and other related items. Then, there are essential imports of plastics and fertiliser for which the country does not have an immediate domestic capacity,” the body said.
“However, even before the break out of the trade war, India has seen a huge jump of 21 per cent annualised rise in steel imports at $1.15 billion in February, 2018 and non-ferrous metals by 33 per cent at $1 billion. Yes, India should be watchful about a sudden jump in steel imports since we have enough domestic capacity available. Similar is the position with coal and related products for which domestic output can be and should be ramped up,” it said.
