Japan, Australia, And America Will Get Export Boosters
Japan, Australia, and America will get export boosters, all three countries intent on reducing trade relations with China. Indian exports are expected to get a booster dose with India, Japan, Australia, and the US becoming trade groups. There have also been meetings between the trade ministers of India, Japan, and Australia regarding this trade group.
According to sources in the Ministry of Commerce and Industry, the group may soon join the US. The formation of a trade group between these four countries will also end China’s domination in the world’s supply chain. Japan, Australia, and America all three countries want to reduce trade relations with China, which is directly benefiting India.
According to foreign trade experts, if India’s share of bilateral trade with Japan, Australia and the United States is 10 percent, then India’s exports will increase significantly. According to the Commerce Ministry data, trade between Australia and India was worth $ 30 billion in 2018. But during this period, Australia did $ 200 billion in business with China.
In the year 2019-20, India did business with the US $ 88.75 billion. In the year 2019, the US did a business of $ 659.8 billion with China. The US exported $ 120.3 billion to China during this period, while the US imported $ 419.2 billion from China. More than $ 300 billion is traded between Japan and China. Whereas between India and Japan, only $ 17.6 billion was traded in the year 2018.
India’s merchandise exports stood at $ 314.31 billion in the last fiscal year 2019-20, according to data from the Commerce Ministry. According to experts, if the US which imports $ 419 billion from China, 5 percent of them will start importing from India, then Indian exports will increase by about 7 percent. Similarly, if Japan and Australia turn their 10 percent trade from China to India, then India’s exports will increase by at least 10 percent.
Sharad Kumar Saraf, president of the Federation of Indian Export Organizations (FIEO), says the US, Japan and Australia are developed economies and having a trade group or agreement with them will prove beneficial for Indian exports.
India has a Comprehensive Economic Partnership Agreement (CIPA) with Japan, but India did not get any benefit from it. India’s share in Japan’s total trade is only 1.1 percent while Japan’s share in India’s trade is 2.1 percent.
The creation of the new group will open Japan’s market to India in many areas. India has no trade agreement with Australia, but Australia has entered into a trade agreement with China due to which the Chinese product is not charged in the Australian market while the Indian product is levied in Australia.
With Australia joining the trading group, Indian products will get priority in the Australian market. India may soon enter into a mini trade deal with the US, under which the US can again restore India’s Generalized System of Preference (GSP) status, which will give India an immediate benefit of $ 5 billion in trade.
