The American President Mr.Donald Trump has launched a trade war with China over the mounting trade deficit, which is 29 lakh crores of rupees liability on the US. Mr.Trump to regulate it and to bring it on par with import export trade enhanced the import duty on Chinese imported goods from 10 to 25 per cent.
India is also having deficit trade balance with China. The India is mainly exporting cotton, coarse rice and medicines to China on the other hand the China is dumping rather flooding the Indian markets with cheap quality goods. The Chinese items are pushed to consumers on the online purchases.
It was America that insisted and manipulated the World Trade Agreement under which no member nation can stop flow of trades (import and export) from other countries. Now it is the America which is suffering the worst of WTA.
People who are going to America are amazed that in shops and markets in US, the goods are on sale are not made in US but made in China. From the very beginning Mr.Trump declared that his policy was ‘buy American and hire American’.
India too has to take measures to balance the trade with China or it should cut off certain imports or impose heavy import duty on it. Due to US-China trade was the share market all over the world are disturbed and share values are falling rapidly daily. In this trade war one thing in favour of India is emerging that it exports are likely to go up 3-4 per cent.
The American economic sanctions on Iran have come into effect from May 2. The India’s number one petro crude buyer is Saudi Arabia and number two is Iraq and Iran on number 3. So is with China it is bringing most of its petro crude from Iran.
The America is likely to give India exemption till June from the economic sanction on Iran, US realized that Parliament elections are going in India and new Government will take shape in June.
Under such hectic election period it will not be possible for India to formulate new policy and make alternate arrangement for petro crude procurement. The India’s number one seller Saudi Arabia has hinted that it would raise the petro crude production to supply more to India to meet the curtailment of petro crude from Iran.
But at the moment the share market of India have become unstable. The Sensex and Nifty have already slumped to two months low. India loss upto 13 per cent. The foreign investors are in panic and selling the share helter-shelter. The share trade giant Tata, Birla and Reliance have also recorded slump.