India’s Export Surge: 20% Growth Amidst Trade War Tensions

Imagine you have a lemonade stand (India’s Export). Suddenly, the mayor of the town says, “You must pay more to sell lemonade here.” You would think your sales would go down. You would think it would be harder to make money. This is exactly what happened to the world economy. President Donald Trump is back in charge of the United States. He likes “tariffs.” A tariff is a tax on things that come from other countries. He wants companies to make things in America. Therefore, he made it expensive to buy things from other places. However, something strange happened. India is selling more, not less. In fact, India’s exports have jumped by 20 percent. This is a huge surprise. Most experts thought India would struggle. But the opposite happened.

In this article, we will explain this mystery. We will look at the 7 big reasons why India is winning. We will keep it simple. And we will see what this means for the future.

The “China Plus One” Strategy

First, we need to talk about China. For a long time, China was the “factory of the world.” Almost everything was made there. Your toys, your phone, and your clothes probably came from China. However, things have changed. President Trump does not like buying from China. He put very high taxes on Chinese goods. Consequently, companies are scared. They do not want to pay these high taxes. They want to move their factories. But where can they go? They cannot move everything back to the USA immediately. It is too expensive. Therefore, they look for a new friend. They look for a country with many people. They look for a country with smart workers.

That country is India. This plan is called “China Plus One.” It means companies keep one factory in China, but they open a new one in another country. India became the best choice. For example, big companies like Apple started making iPhones in India. They did this to avoid the trouble in China. As a result, India is sending more phones to the USA. The “trade war” was mostly against China. Therefore, India benefited from the fight.

Selling Services, Not Just Things

Second, we must understand what India sells. When you think of exports, you might think of cars or shoes. These are physical things. However, India is famous for something else. India is famous for computers and brains. This is called the “Services Sector.”

It includes things like:

• Writing computer code.
• Answering customer service calls.
• Helping banks with math.
• Designing websites.

Here is the secret. It is very hard to put a tariff on a service. If a box of shoes arrives at a US port, the customs officer can tax it. But if a computer code is sent over the internet, the officer cannot stop it easily. President Trump’s trade war focuses on “goods.” He focuses on steel, aluminum, and cars. But India sells invisible services. Consequently, Indian IT companies are safe. They are still growing. American companies still need help with their computers. Therefore, they hire Indian companies. This keeps the money flowing. It helps the export numbers go up.

The Friendship Between Leaders

Third, politics is important. Business is not just about money. It is also about friendship. President Trump likes to make deals with his friends. He has a good relationship with India’s Prime Minister, Narendra Modi. They have met many times. They talk about being partners. This friendship helps India. While Trump is tough on many countries, he is often softer on India. He sees India as a partner against China. For instance, the US wants to be strong in Asia. To do that, they need a strong friend in Asia. India is that strong friend. Therefore, the US government encourages companies to work with India. They sign special agreements. They make it easier to trade. Even though there are some tariffs, the overall mood is friendly. This gives businesses confidence. They feel safe buying from India. They know the two leaders get along. Consequently, trade continues to grow.

The Government’s “Make in India” Plan

Fourth, India helped itself. You cannot just wait for luck. You have to work for it. The Indian government created a smart plan. It is called “Make in India.” They wanted more factories. So, they offered rewards. This system is called the PLI Scheme. That stands for “Production Linked Incentive.” It sounds complicated, but it is simple.

Here is how it works:

• Step 1: The government tells a company, “Please build a factory here.”
• Step 2: The company builds the factory.
• Step 3: If the company sells a lot of products, the government gives them cash back.

It is like a rebate. Or a prize for doing a good job. This made companies very happy. It made it cheaper to make things in India. For example, this helped the electronics industry. Many parts for TVs and phones are now made in India. Because of this help, Indian products are cheaper. Therefore, even if Trump adds a small tax, the Indian product is still affordable. The “Make in India” discount cancels out the “Trump Tax.” This was a very smart move by India.

Diversifying the Market

Fifth, India did not put all its eggs in one basket. The United States is a big customer. But it is not the only customer. India started selling to other countries, too. For instance, India signed a big deal with the UAE (United Arab Emirates). They also signed a deal with Australia. This is called a “Free Trade Agreement.”

It means India and these countries promised not to tax each other.

• If the US makes it hard to sell, India sells to Dubai.
• If the US blocks steel, India sells to Europe.
• If the US blocks medicine, India sells to Africa.

This is called “diversification.” It makes the economy strong. It is like having three jobs. If you lose one job, you still have two others. You are still safe. Because of this, India’s total exports went up. The growth came from many places, not just America. However, the US is still buying a lot. But the other friends helped push the number to 20 percent.

The Boom in Medicine and Chemicals

Sixth, we have to look at what the world needs. The world always needs medicine. India is known as the “Pharmacy of the World.” India makes a lot of generic medicine. These are medicines that work well but cost less. The United States buys a lot of medicine from India. Even in a trade war, you cannot stop buying medicine. People need it to live. President Trump wants to lower drug prices in America. Buying from India is a good way to do that. Indian medicine is cheaper than American medicine. Therefore, this sector kept growing.

In addition, India sells chemicals. These are used to make plastics, paints, and fertilizers. Recently, environmental laws got strict in other countries. Factories in Europe had to close because they were too old. However, India has new factories. They could fill the gap. Consequently, when other countries stopped making chemicals, India stepped in. They exported more chemicals to the US and Europe. This added billions of dollars to the total. It shows that India was ready when the world needed help.

A Weak Currency Helps Exports India’s Export

Finally, we have to talk about money math. This part is a little tricky. But we will make it easy. Every country has its own money. India has the Rupee. The USA has the Dollar. The value of money changes every day. Recently, the US Dollar became very strong. This is because the US economy is doing well. On the other hand, the Indian Rupee became a little weaker compared to the Dollar. You might think a weak currency is bad. But for exports, it is actually good!

Let’s pretend you are an American buyer.

• Last year, $1 could buy you 80 Rupees worth of candy.
• This year, $1 can buy you 85 Rupees worth of candy.

Suddenly, Indian candy is cheaper for you! You get more for your dollar. Therefore, American companies want to buy more from India. It is like everything in India is on sale. This helped India’s exports jump. Because the Rupee was cheaper, Indian goods were cheaper than goods from Europe or China. So, buyers chose India. This “currency advantage” played a big role. It helped push that number up to 20 percent.

World Economy is a Wild Place.

To sum it up, the world economy is a wild place. President Trump started a trade war to help America. He wanted to stop buying from foreign countries. However, business always finds a way. India used a mix of smart plans and good luck.

• They took factories from China.
• They sold services that can’t be taxed easily.
• They used government rewards (PLI).
• They stayed friends with the US.
• They sold medicine that everyone needs.

Consequently, India defied the odds. While other countries are worried, India is celebrating. A 20 percent jump is amazing. It shows that India is becoming a superpower in trade. Will it last forever? We do not know. The rules change fast. But for now, India has found the secret recipe. They are winning the game, even when the rules are tough.

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