US still needs India
02/02/2017
“We are aware, of course, of some of the statements President Donald Trump has made about trade,” said the Council for Leather Exports (CLE) chairman for northern India, RK Jalan, “but we also know he is aware of the realities.”
Speaking at a press conference at the 2017 India International Leather Fair (IILF), he went on to list several reasons for India to be optimistic, saying: “There are no factories left in the US, plus, even if there were, there are no people there who could look after the factories. Then there is the question of what will happen with Mexico, which is of interest because no matter how greatly Mexico is affected by these changes in the end, we are sure some production lines will come to India.”
Mr Jalan also mentioned the collapse of the proposed Trans-Pacific Partnership free trade agreement, which might have left India at a disadvantage as a supplier to the US market compared to rivals such as Vietnam, which was to be part of the agreement. Lastly, he mentioned that proposed tariffs of 10% on products being imported into the US form India were “not such a big jump” from the 8.5% Indian finished product manufacturers pay today.
His colleague on the CLE committee, Habib Hussain, said he believes Indian companies setting up factories in the US is a real possibility. Mr Hussain, who runs the Chennai-based maker of leathergoods and shoes AV Thomas, said: “The thing the US president is really concerned about is creating jobs and if we set up factories in the US we will create jobs. Even an operation involving 50 people there would be big news.”
A long-standing supplier to Wal-Mart, AV Thomas currently has 5,200 people devoted to making leather products for the US, which he described as being “difficult to replicate” if India were to be excluded from the US market. “We have already had high-level discussions about operating a factory there,” he added, “at least for final assembly of components manufactured in India”.
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