Apples, walnuts, clothes, steel, cement, etc: J&K braces for ripple effect of US-China tariff tussle

By: Faisal Khan and Seher Sheikh – Ziraat Times

Srinagar: What would become cheaper and costlier for consumers in J&K?

The just-started trade war between the United States and China is about to reshape global trade flows, with India emerging as a key alternative market for many redirected goods. The shifting trade dynamics are expected to make certain products more affordable for Indian consumers, while others may become costlier due to disruptions in global supply chains.

Ziraat Times engaged in an analysis of what these trade dynamics would actually mean for consumers in J&K. Here are the main findings of the analysis:

Impact on Jammu & Kashmir

Firstly, let us talk about Kashmir’s biggest export revenue earners – apples, walnuts, almonds. As American apples and almonds lose big Chinese markets, analysts predict that some of these fruits, in reduced price, are likely to be shipped to India.

As China retaliates with tariffs on US imports, American exporters are looking for alternative buyers, and India is a prime candidate, analysts estimate.

US farmers, unable to sell their produce to China, may offer discounts to Indian buyers on almonds, walnuts, and apples.

In the upcoming harvest sesson, cheaper apples from the US could impact Kashmir’s apple growers, forcing them to compete with imported Amercian produce of superior quality.

California’s almond industry is particularly going to be affected, and Indian consumers could see price drops in dry fruits.

Similarly, soybeans and sorghum, key ingredients in cooking oil and animal feed, making livestock products like eggs and meat slightly cheaper.

Chinese goods to become cheaper in India

As Chinese exports face heavy tariffs in the US and Europe, many manufacturers are likely to redirect their products to India at lower prices to maintain factory production levels.

Same is the case with electronics. Chinese electronics brands and component manufacturers are expected to push excess inventory into India, leading to a decline in prices for smartphones, laptops, and tablets. Companies like Xiaomi, Oppo, Vivo, and Lenovo will likely offer aggressive discounts as they seek to capture a larger Indian market.
Same is the case with semiconductors & Printed Circuit Boards (PCBs). With the US restricting Chinese chip exports, India may receive a surge of cheaper semiconductor supplies, potentially benefiting the country’s electronics industry.
And what could brighten up the mood of J&K’s energy consumers is cheaper LED lights and solar panels. Analysts estimate that China’s overcapacity in the renewable sector will drive down costs for Indian consumers looking for energy-efficient solutions.
Then the cheaper chemicals & pharmaceuticals
India relies heavily on China for raw materials used in pharmaceuticals and industrial chemicals. With Chinese suppliers facing global trade barriers, India, including J&K, may see cheaper Active Pharmaceutical Ingredients (APIs) in the coming days. Used for making antibiotics, vitamins, and other essential drugs, APIs account for nearly 70% of India’s pharmaceutical imports from China. An oversupply could drive down drug production costs, analysts estimate.

Sumilarly, there are likely to be lower prices for PVC & Polyethylene. These materials, used in packaging, plumbing, and manufacturing, could become more affordable due to excess Chinese production.

US goods likely to become cheaper in India in case there are no major anti dumping tariffs imposed by India
Energy & raw materials
India’s energy sector could benefit from lower prices of Liquefied Natural Gas (LNG). As China reduces US LNG imports, Indian energy firms may negotiate long-term contracts at lower prices, reducing fuel costs.

With China imposing restrictions on US coal, Indian power plants may secure discounted supplies.

Products likely to become costlier in India

While certain imports will become cheaper, other goods may see price hikes due to indirect effects of the US-China trade war.

Steel & aluminum are a case in point. As Indian steel producers increase exports to the US (to replace Chinese steel), domestic supply may tighten, pushing up prices for Indian consumers and construction industries.

With the US imposing restrictions on Chinese textiles, global demand for non-Chinese cotton will rise, potentially increasing costs for India’s textile industry. This could make clothing and fabrics more expensive.