With mounting trade war between America and China India is automatically getting opportunities to increase its export market by four or more percent. The US-China trade has become so lopsided that US incurring the loses of 375 billion dollar in the form of trade deficit. The US has increased trade tariffs from 10 to 25 persons of 200 billion dollar on Chinese goods. It will hit the Chinese economy very badly.
In America there is an anti-China wave of not to purchase any Chinese goods. It will result that Chinese already produced as export items are getting dumped and consequently it will result in closure of many industries in China. In the near future the China is likely to be under trade compulsion to sell off its dumped stocks to other countries on under price and sell it into clear off the goods on loss price.
The Indian industry want to avail this opportunity to increase its export market.The EEPC (Engineering Export Promotion Council-India) has sought cooperation from the Reserve Bank of India to reduce bank interest rates to cut the cost of production of Indian good to remain competitive in the world markets by increasing our exports. The Reserve Bank of India should facilitate an easy and less expensive bank loan, more to export oriented industries.
There is very anxious global economic environment market by ever increasing US China trade tension, instability in the crude oil prices which tend to leave foreign exchange highly volatile.
Presently the Indian exporters particularly in the engineering sector are facing high cost and other challenge in the competing with other nations. The RBI should carve out an export friendly interest rate structure and advice other banks also. The RBI should formulate interest equalization scheme for exporters.
The EEPC-India has also suggested the banks should not ask for external credit rating and not to charge loan application processing and credit limit renewal fees.
The RBI for a long time adopted the policy of linking the Rapo rates with the food inflation and totally neglected other sectors. The UPA Finance Minister Mr.P.Chindambaram and later the Modi Government Finance Minister Mr.Arun Jaitley both advised the RBI to not to take lopsided view on the food inflation but should attend to other sectors like industries, trade and commerce that were in dire need to capital investment.
Even the food inflation notion of RBI was not correct. There is no food inflation based on demand and supply. Every year the Central Government as a matter of agro policy increasing the support price of food grains, pulses, and oil seeds. This is resulting in price increase of other commodities. The Government policy of minimum support price cannot be termed as inflationary.
The US China trade war is an opportunity for India to pick up and establish it global export markets.