United States and China agreed to revive trade talks as President Donald Trump said he would hold off on new tariffs on Chinese exports. The agreement between the countries at the G20 summit in Osaka marks a temporary pause in the hostile trade ties between two of the world’s largest economies. The rising trade tensions between US and China had hurt market sentiments across the globe and raised prospects of a sharp slowdown in global growth and trade.
“There are two aspects to the deal. If the hostility had persisted for some time, India could have benefited due to deflection of some trade due to the tension between US-China,” said Biswajit Dhar, professor at Jawaharlal Nehru University.
“This is very positive but has to be followed by a concrete deal to ensure that such tensions do not recur in a few months. The deal will help in bringing back positive sentiment in global trade and investment, “ said Manab Mazumdar, deputy secretary general at industry lobby group Ficci.
“End of hostilities is good for the global economy and will help bring in some stability which could also benefit India,” he said. On the issue of India-US trade ties, Dhar there were “too many issues” which a trade agreement may not be able to deal with. India has several red lines as the US has raised issues on data localisation, IPR, he added. The US has promised to work with India to resolve the outstanding issues and Trump has vowed to unveil a “very big trade deal” with India.
The stock market is expected to react positively to the deal when it opens on Monday.
“It’s a very positive development for global markets. One should see a positive opening starting from Japan when trading resumes on Monday. In specific to India, while there has been no budget rally so far, the possibility of that beginning now with just four days to go, looks certain,” said Arun Kejriwal, director at KRIS, a Mumbai-based investment advisory firm
The intense trade tensions between two of the world’s largest economies had prompted experts to say that India could benefit from the spat as companies planning to exit China could set up base in India. Expert had said it provides an opportunity for India to create exports hubs which in turn could create jobs.
The Osaka G20 summit also had several gains for India. Prime Minister Narendra Modi raised the issue of dealing with fugitive economic offenders among other crucial points
“We strongly put forward the need to deal with fugitive economic offenders. It has been a strong agenda, we have been working on tax evasion, corruption, economic offences and fugitive offenders running away (from the country). We have also been very strongly championing this,” Suresh Prabhu, India’s sherpa for the G20 told reporters in Osaka.
The G20 communique also vowed to continue practical cooperation to fight corruption and reaffirm their commitment to deny safe haven to persons sought for corruption and their proceeds of corruption consistent with G20 and international commitments and domestic legal systems and promised to work more closely on asset recovery cooperation.
“We look forward to the scoping paper on international cooperation dealing with serious economic offenders and recovery of stolen assets in relation to corruption to be prepared by relevant international organisations. In addition, we also welcome the work on the linkages between corruption and gender being undertaken by relevant international organisations,” the G20 leaders’ declaration said.
For the past few years, India has been consistently driving home the point about the dangers of fugitive economic offenders as some countries had resisted attempts to include it in the communique in the previous summit.
US-China trade truce will help India: Experts – Times of India