The escalating trade war between the United States and China is expected to provide a significant boost to India’s textile industry, according to a new report by the Global Trade Research Initiative (GTRI). As US companies seek to diversify their supply chains away from China, India’s domestic manufacturing capabilities, particularly in textiles, are poised to attract increased investment and attention.
The recent introduction of the ‘Neither Permanent Nor Normal Trade Relations Act’ (PNTR Act) and the ‘Axing Non-Market Tariff Evasion Act’ (ANTE Act) in the US Senate has intensified concerns about the trade war’s potential impact on global markets. These bills aim to counter China’s trade practices by imposing higher tariffs and trade barriers, creating opportunities for countries like India.
GTRI Founder Ajay Srivastava believes that India can capitalise on this situation by attracting investments from US companies seeking alternatives to China. “As US businesses explore options outside of China, India’s growing textile sector presents a compelling opportunity for foreign investment,” he stated.
The report recommends that the Indian government actively pursue strategies to attract multinational companies looking to diversify their supply chains. By strengthening domestic production capabilities in textiles, machinery, and other related industries, India can fill the void created by reduced Chinese imports to the US.
However, the GTRI also cautions against inviting Chinese firms for export-related investments. Given the potential for US actions against Chinese companies to impact India’s own exports, it is crucial to exercise caution in such partnerships.
Overall, the escalating US-China trade war presents a significant opportunity for India’s textile industry to expand its global footprint and attract increased investment. By implementing strategic measures to enhance domestic production capabilities and attract foreign investment, India can position itself as a preferred alternative for US companies seeking to diversify their supply chains.
