In Trump tariff threats, Niti Aayog CEO sees opportunity for India: 'Can lead to massive boom'

US President-elect Donald Trump’s threat to impose higher tariffs on all goods imported from Mexico, Canada, and China – in purported retaliation against illegal drugs and undocumented migrants crossing US borders – has laid the ground for a trade war. Trump vowed to introduce 25 per cent tariffs on imports from Mexico and Canada and an additional 10 per cent on China until they stop illegal immigration and the flow of illegal drugs such as fentanyl into the United States.

Canada, Mexico and China warned that any such action could upend the economies of all four countries.

In all this, India is seeing a silver lining for itself.

Niti Aayog CEO BVR Subrahmanyam on Wednesday said the higher tariffs of the trading partners of the United States will provide huge export opportunities for India, suggesting that the domestic industry should prepare itself to tap into that.

"Whatever Trump has announced so far...I think there are opportunities for India. We are a man at first slip, the ball is coming in our direction. Are we going to hold it or drop the catch, it's for us to see...and I think, you will see some steps in next few months," Subrahmanyam told reporters in New Delhi.

India, already a major US trading partner with $77.51 billion in exports and $42.2 billion in imports last fiscal year, could see a "massive boom" if industries prepare adequately, he said, indicating that “there is going to be trade diversion.”

The US is also the largest market for India’s IT sector, accounting for 70% of its export revenue.

The Niti Ayog CEO said there is going to be huge disruptions because of that in the US trade and that would open up "huge" opportunities for India.

"Our relationship with the US is multi-dimensional. It is very deep. It's not standing only on one leg which is trade, there are many many other dimensions. The two nations have a much deeper relationship and all these things will be taken into account," he said.

During his election campaign, Trump called India an "abuser" of import tariffs, a claim that echoed his October 2020 statement labelling India the "Tariff King".

Trump has also warned BRICS countries against any move to replace the US dollar or face economic consequences, including being shut out of the US market.