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India cannot retaliate at the time of global trade war: ASSOCHAM

In the wake of US administration slapping import tariffs of 25% on steel and 10% on aluminium, unfolding the prospect of an all-out global trade war, the industry chamber Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its latest report has stated that an annual trade deficit of as much as $150 billion with the US alone will not provide India much space to retaliate at the time of global trade war as most of the Indian imports are essential in nature. It also said that the country should engage bilaterally with its key trading partners to promote exports.

ASSOCHAM also said that the country cannot flex too much of their importing muscle, even if their exports face consequences of trade war and are subjected to tariff barriers. It added that 'the best course would be to keep engaged with the major trading partners, without aligning ourselves too much into a single bloc'. It suggested that in cases where exports are affected, India must engage bilaterally and use the channel of the World Trade Organisation (WTO).

The industry chamber further said that India may end up the current fiscal with a hefty import bill of $450 billion against exports of about $300 billion, almost one-fourth of this would be only on account of crude and other related items. Then, there are essential imports of plastics and fertiliser for which the country does not have an immediate domestic capacity. However, it noted that even before the outbreak of the recent trade war, the country in February, has seen a huge jump of 21% in annual steel imports at $1.15 billion, and of non-ferrous metals by 33% at $1 billion.

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