The United States is the largest apparel trading partner of India, while, for the former, India ranks fifth amongst the readymade garments (RMG) importing destinations.
India’s RMG export to the United States between January and September this year was $2.27 billion—a 29.89 per cent fall from what it was during the same period last year.
Some experts believe that the problems being faced by India in its trade relations under the Trump regime would continue to a large extent under Biden although the aggression and unpredictability may go down.
India is hoping for restoration of benefits for exporters under the Generalised System of Preferences (GSP) scheme ended by Trump or a roll-back in the unilateral application of penal import duties on aluminium and steel, the wait may be long.
India, which has reduced its tax rates substantially, may benefit from Biden’s announced policies of taxing corporates at a higher rate than present levels.
If the US under Joe Biden does indeed go ahead with higher tax rates for corporates from 21 per cent to 28 per cent, US multinationals may find investment in India more attractive in view of the recently reduced corporate tax rate.
India may not only attract fresh foreign direct investment (FDI), but US-based global multinationals may also prefer to keep their profits in offshore branches like India, tax experts feel.
