All around the world the echo of the trade war is sounding on its pinnacle with the currency crises in the emerging markets adding flavor of real disruptions at the global level. But really if we talk about India, is it too bad too criticize what’s all happening or its too good to leverage upon and become the next manufacturer of the world?

There was a time when India and China use to share the level of development and was a neck to neck competitor to India but today it would be a little odd to describe that the situation has been the same. Of course the situation is not the same. Because today China is sharing its level of development with the world’s largest economy and competing neck to neck giving a cut throat competition to USA. So in 80’s India and China and at present China and USA.

China’s growth has been a result of massive FDI, increasing exports through undervalued currencies, autocracy resulting into faster execution are the factors which have worked for China to grow at such a high pace. Presently China dominates global trade with a market share of almost 20%. This share is clearly visible in its $3-trillion plus forex reserves which are more than India’s GDP. But these growth story has now a new turn where USA has started levying tariffs on Chinese imports making them expensive which has again open a new route for other countries including India to provide an alternative.

But with all these come the several effects of the Trade War which may hamper India in both positive as well as in negative ways. First of all, as the China now getting a narrowed path to push their huge quantum to USA, obviously it will somewhere want to dump the same which has not found place in USA and the prospect can be India for them if India didn’t react to this situation quickly and wisely, again at the same time India should be cautious in decisions regards to joining Regional Comprehensive Economic Partnership (RCEP) as it will be disastrous to provide more market access to China.

But looking to its positives for India is in a disruption happening in the supply chain especially originating from China. Apple originates 73% of its shipment from China and USA imports ICT products worth about of $200 billion. This whole chain is looking for an alternative to source from. And India learning from growths of countries like China, Japan, South Korea and others should learn to grab this opportunity to manufacture goods for the world and be the alternative which will be also helpful to India to improve on to the exports resulting an improvement in the current account. India should grab the opportunities like exporting soybeans to China as they have laid tariffs on imports from USA.

Here in this situation India has to move ahead strategically i.e., by leveraging its strengths to attract the global manufacturers to set up base in India using the large domestic demand as push factor for the same. Facebook recently has proposed to invest $1 billion to build a Data Centre in Singapore. Now India being the largest user of Facebook in Asia it should have such an economic environment which encourage Facebook for building a Data Centre in India. But for all these India needs to work upon several issues such as IP protection, labor laws, infrastructure and taxation mechanism, which are the main considerations for any global manufacturer.

But whatever strategy or policies India may want to follow but India will have to react very quickly as the global disruptions are highly prone to the changing dynamics and at the same time it is important for India also to sustain and get out of the currency depreciation issue which may get a relief through increased exports.