The outgoing United States Ambassador to India said that there is “no question” that the country needs to cut its high taxes to compete with more business-friendly Southeast Asian rivals amid US President-elect Donald Trump's trade war with China, reported the news agency Bloomberg on January 17.
Even though Indian manufacturers are set to benefit if Trump’s tariffs force US companies to reduce trade with China, India needs to do much more to improve its domestic business environment to attract investment, Ambassador Eric Garcetti told the news agency.
Highlighting the importance of reducing high tariffs is a key step for the country, Garcetti said, “American companies don’t need India.”
“There’s a great market here if they want to be in the marketplace, but for their international exports, they don’t have to be in India. It’s oftentimes easier in Southeast Asia and Mexico,” said the US Ambassador as per the news report.
US President-elect Donald Trump unveiled his plans earlier and threatened the South Asian nations to be prepared for action if they keep high taxes imposed on American goods.
Mint reported earlier, citing the news agency Reuters, that the upcoming Trump administration has threatened to impose tariffs of 10 per cent to 60 per cent on goods from China after Donald Trump takes office on January 20.
The agency also reported that the US has strengthened trade and its links with India in recent years as the nation eyes the South Asian country as the defensive wall against the dominant Chinese superpower.
Garcetti said that even though Trump's concern over India's trade barriers loom over international trade relations, he expects India and the US to continue to come closer as the incoming National Security Adviser Mike Waltz and Secretary of State nominee Marco Rubio have been long supporters of friendlier relations with India, according to the Bloomberg report.
“You couldn’t get two more India-focused friends and China hawks,” he told the news agency. “A generation ago, the relationship we now have between the US and India would have been unimaginable, and I think a generation from now it’s going to be seen globally as absolutely indispensable.”
Joe Biden administration's relationship with India promoted cooperation in sectors like defence, technology sharing and business investment.
During Biden's tenure, companies like Apple have looked at India as their production hub, while others like Micron Technology and Microsoft have pledged to increase investment in the nation. This shows the interest among American multinational firms to invest in India's growing infrastructure and business ecosystem.
Despite's India's growth story, countries like Vietnam is giving the South Asian nation tough competition for foreign investment by providing more business-friendly environment, according to the agency report.
(LiveMint couldn't independently verify the report.)
Catch all the Business News , Economy news , Breaking News Events andLatest News Updates on Live Mint. Download TheMint News App to get Daily Market Updates.