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Amid Intensifying US China Trade Dispute, Indian Exporters Eye Gains

Orient Craft’s new unit in Jharkhand, one of India’s least developed states, will employ about eight thousand workers

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US, China, Trade Dispute, Indian Exporters
Orient Craft, one of India's largest apparel exporters, says it could benefit from increased business as the US-China trade war intensifies. This building in Gurgaon on the outskirts of Delhi houses its office and one of its garment units. VOA

As work on establishing a massive garment-manufacturing unit by one of India’s leading apparel exporters enters the final stages, the company is optimistic about keeping the machines humming. Slated to begin production in August, Orient Craft’s new unit in Jharkhand, one of India’s least developed states, will employ about eight thousand workers.

Inquiries from buyers in the United States, its biggest market, have increased in recent months as a trade dispute with China intensifies, according to A.K. Jain, who heads the Commercial department at Orient Craft. That is why he is upbeat about generating new business. “This is an unbelievable blessing in disguise,” he says. “It will give us an edge.”

Exporters in India are reaping the benefits of the trade war between the world’s two biggest economies as business with both countries jumps, according to Ajai Sahai, who heads the Federation of Indian Export Organizations.

“While overall exports have gone up by nine percent, exports to the U.S. have gone up by 13 percent and to China by 32 percent,” he says. And as the confrontation escalated last week after the two countries failed to reach a deal, his optimism increased. “Since the tariff hike is now substantial from 10 to 25 percent we feel we will have more advantage in market access.”

US, China, Trade Dispute, Indian Exporters
A slowdown in the Indian economy is being attributed to a drop in consumption by an affluent middle class. VOA

India is among a handful of countries set to benefit from the U.S.-China trade dispute, a report by the United Nations Conference on Trade and Development stated in February. “The saying ‘it’s good to fish in troubled waters’ could apply to some bystander nations,” the report said, pointing out that most of the Chinese exports subject to U.S. tariffs will be captured by firms in third countries.

While China has opened its doors wider to a range of agricultural products from India such as rice and sugar, exports to the United States have increased in areas such as chemicals, pharmaceuticals, jewelry, auto components and apparel.

“In various products we were losing out to China with a very narrow margin. With the hike, we are able to offset that,” says Sahai. “That is why the tariff war has presented us an opportunity to enter markets in the U.S. in some areas we were hardly penetrating.”

But even as Indian exports benefit, trade experts warn that clouds are also gathering over New Delhi’s trade relationship with Washington. In recent months, U.S. President Donald Trump has slammed Indian duties on some U.S. goods, saying that India is not providing “equitable and reasonable access” to its markets.

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Economists also warn that an eventual slowdown in global trade due to the U.S.-China trade spat will hit all countries including India, which is already staring at an economic slowdown

Growth in the world’s fastest growing major economy flagged to 6.6 percent in the last quarter of 2018 – it’s lowest in more than a year. It is not expected to fare much better this year.

The slump is blamed on slackening domestic consumption, which powers the Indian economy. Unlike East Asian countries, which have raced ahead on the back of exports, growth momentum in India is largely based on an affluent middle class snapping up goods such as cars, refrigerators, air conditioners and other consumer goods.

But there are concerns as automobile sales, the barometer of consumption, plunged to the lowest in nearly eight years in recent months.

US, China, Trade Dispute, Indian Exporters
Like other carmakers, the Hyundai showroom in Gurgaon has witnessed a decline in sales of cars in recent months. VOA

At the Hyundai car showroom in the upscale business hub of Gurgaon, near Delhi, a range of swanky models beckon customers, but there are few to be seen. This is in marked contrast to the last three years when buoyant automobile sales helped India overtake Germany to become the world’s fourth largest automobile market. That prompted car makers such as Hyundai, Honda and Toyota to expand their presence in the country.

“In recent years, March and April used to be good months. But now 20 to 30 percent drop is there in these months also,” says Gagan Arora, business head at the Hyundai showroom. “There is a slowdown in the whole industry. New buyers are not being added so frequently.”

Economists say while rising exports to the United States and China present a silver lining, the first challenge facing India’s new government due to take office after vote counting in elections is completed this week, will be how to restore overall momentum to the economy and see why consumers are not so willing to open their wallets. (VOA)

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US Government Begins Probe into Google Over its Labour Practices

"Four of our colleagues took a stand and organised for a better workplace. This is explicitly condoned in Google's Code of Conduct, which ends: 'And remember... don't be evil, and if you see something that you think isn't right -- speak up.' When they did, Google retaliated against them," the employee activist group wrote in the blog post

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Google Logo. Pixabay

The US government has launched a probe into Google over its labour practices following a complaint from four employees who have been fired by the tech giant.

The four workers who filed a lawsuit against the company last week, claimed they were fired from Google for engaging in legally protected labour organizing, reports CNN Business.

The National Labor Relations Board has begun a formal probe into the complaint.

The tech giant has been accused of “union busting” and retaliatory behaviour after it sacked four employees for allegedly violating the company’s data security policies.

In a statement, Google said it dismissed four individuals who were engaged in intentional and often repeated violations of its longstanding data security policies.

Google
US begins probe into Google’s labour practices. Pixabay

“No one has been dismissed for raising concerns or debating the company’s activities,” said the company on Monday.

Google is in the midst of controversy over its strained relationship with employees.

In an earlier blog post on Medium, an employee activist group, “Google Walkout for Real Change”, said that the company is illegally retaliating against prospective union organisers.

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“Four of our colleagues took a stand and organised for a better workplace. This is explicitly condoned in Google’s Code of Conduct, which ends: ‘And remember… don’t be evil, and if you see something that you think isn’t right — speak up.’ When they did, Google retaliated against them,” the employee activist group wrote in the blog post.

The new CEO of Alphabet Sundar Pichai faces extreme challenges as Google stares at several high-profile external probes into its alleged anti-trust market and data practices — from the US to the European Union regulators — including internal tensions with staff over discrimination at work and HR transparency. (IANS)