Impact of trade war between United States and China on Indian economy

How the trade war between United States and China impacts the India economy?

Ans: On-going trade war between two economic behemoths —The USA and China–could lead to some changing dynamics in the Indian economy  which witnessed an impressive growth of 7.5 per cent, the fastest among all the all major economies in the world,

In the last month, the value of the rupee nosedived to all-time low, when in some occasions it was hovering around mid-68s against the US dollar. This happened after US President Donald Trump’s threat of imposing a fresh round of tariffs on exports worth 200 million dollars. This trend can be traced to weakening of the US dollar which automatically creates a negative impact on the trade deficit of India causing a chain of reaction of sorts.

Following the raging global trade war, key indices in the Indian share market dropped due to the cautious approach of the investors. The Sensex of the Bombay Stock Exchange witnessed regular upheavals. NSE Nifty’s performance too was along the same lines as it also saw significant drops.

As Trump imposed duties on steel and aluminium, India now has to pay nearly 241 million dollars’ worth of tax to the USA.  India, on the other hand, has proposed imposing duties on 30 different types of goods. This will ensure that the US has to pay about 238 million dollars to India. However, this will make life more difficult for the end consumers as everything that falls under the tariff scanner is expected to become more expensive.

As far as manufacturing industry is concerned, the additional duty imposed could have a detrimental effect, as the cost of production will go up due to the rise in the price of raw materials. Moreover, other things which may face an increase in price include foreign motorbikes with high engine capacity and food products like almonds, walnuts and pulses.

Meanwhile, according to a report published in Economic Times, the US-China trade war is indirectly helping India boost its exports, but that may begin to hurt smaller economies and others if China’s growth slows down due to the conflict, Beth Ann Bovino, US chief economist for rating company Standard and Poor’s said.

But the Indian rupee may weaken further if the US government goes ahead with more fiscal cuts to boost its economy. It would force more funds to chase growth there, she said. The Chinese are seen substituting their cotton imports from the US to India and other Asian economies.

India will focus on boosting its exports to the US and other global markets as Chinese shipments become unattractive amid the trade war. The New Delhi is focusing on a handful of items like automotive parts, chemicals, electrical equipment among others after the US and China slapped reciprocated duties on each other’s goods.

Even though judicial activism is against the separation of powers it is remedying the many public issues which are avoided by the executive. Is it better to allow judicial activism in India?

Judicial activism means active participation of judiciary in rule making, new interpretation of laws and directing the other organs of democracy like executive and legislature. Judicial Review forms a part of judicial activism which it has empowered itself to review the laws enacted by the legislature, strike down unconstitutional provisions.

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