A US trade deal with tariffs on labour-intensive Indian products at a lower rate than some of the competitors would be a “big advantage” and present an opportunity, according to NITI Aayog Vice Chairman Suman Bery.
Asked during an exclusive interview with Media about the possible effects of the tariff turmoil, he said, “There’s an opportunity there.”
“It’s a question of negotiation,” he added.
“If we could have, if you like, low-duty access for some of our labour-intensive products to the US market, while some of our competitors don’t enjoy quite that, that could be a big opportunity for us.”
“It swings in roundabout, we’ll have to give up something, but if we were to get that (lower tariff), that would be really quite important for us,” he said.
Negotiators from India and the US are racing to forge a trade deal before US President Donald Trump’s August 1 deadline.
Bery was at the UN for the High-level Political Forum on Sustainable Development that concluded on Wednesday.
It brought together Ministers and senior development officials from several countries to take stock of the progress towards achieving the sustainable development goals set for 2030.
Overall, though, Bery said, “The Indian growth model has been, you know, less trade intensive than many of our peers in Asia in particular.”
Therefore, the tariffs would have less of an impact on India’s economy compared to other Asian countries more reliant on exports.
Under Trump’s trade deals with countries with a labour-intensive export profile broadly comparable to India’s potential in some areas, the tariff will be 20 per cent for Vietnam, and 19 per cent for the Philippines and Indonesia.
For some of the countries that have not reached an agreement with the US, Trump has announced tariffs of 35 per cent for Bangladesh, 36 per cent for Thailand, and 25 per cent for Malaysia if there’s no deal before August 1.
An economist, Bery has experience of international financial institutions with nearly 30 years at the World Bank, and multinationals as the chief economist of Royal Dutch Shell, giving him unique insight into the policy intersections of trade, investment, globalisation and development.
Asked if there was a need for greater inflow of capital for growth, he said, “I think capital is less important than linkages and technology.”
Explaining it, he said, “We, NITI Aayog, helped design a programme called production-linked incentives (PLI), which included the mobile phone sector and succeeded in attracting Apple to make iPhones in India.”
“We would like much more of that,” he added.
According to NITI Aayog, PLI “seeks to bring size and scale to India’s manufacturing capabilities and exports in key sectors, while creating and nurturing global champions” by incentivising “enhanced production for a limited number of eligible anchor entities, in the key sectors, within a limited timeframe”.
Bery said that he met privately with some business leaders “to get a sense of what needs fixing, what some of the hesitations are, and there’s no one ‘Big Thing'”.
“There’s a lot of interest in India, but there’s a sense that India makes things harder than it needs to at particularly the state level,” he added.
