The moment when the India seemed to approach her goal of turning into a global industrial hub, USA and the China they announced one new trade agreementwhich threatens to derail the ambitions of New Delhi To succeed Beijing as a “factory of the world”.

As the Bbcthe agreement, reached in Switzerland, led to a sharp decline in US duties to China – from 145% to 30% – while India duties remain at 27%.

According to the Ajay srivastavahead of the Institute Gtri In New Delhi, this change could lead to either stagnation or even investment from India to China. “Low -cost assembly lines may survive, but the value of added value is threatened,” he warns.

Change contradicts the optimism that prevailed in India a few weeks ago, when the Apple stated that it conveyed the majority of production iphone For the US from China to India. However, US President Donald Trump revealed that he had asked Apple’s CEO, Tim Cooknot to invest in India, describing it as “one of the most protective economies in the world”.

Despite developments, some economists believe that the US disconnection of the US from China will continue, favoring India in the long run. The Monti government is more willing to attract foreign investment, while negotiations on bilateral US -India trade agreement are ongoing.

However, progress remains limited. India has been performing low in boosting its industrial production, with its participation in GDP remaining 15% in the last 20 years. In spite of the motives through the program Pli (productive incentives), foreign investments remain limited.

In addition, India is still largely dependent on China for raw materials and components in sectors such as electronics and mobile telephony. Although it exports iPhones, the domestic value created remains limited – with Apple making the biggest profits.

Srivastava notes that without domestic production of components and high value added know -how, the benefits for India will be mainly accounting and not essentially. “Assembling more iPhone in India does not mean much if value remains elsewhere,” he says.

At the same time, analysts warn that other Asian countries – such as Vietnam and Thailand – remain competitive and continue to attract investments due to lower duties and more favorable terms.

Finally, there is concern that Chinese companies may attempt to use India as a channel of products to re -export to the US – a possibility that, although risked, does not appear to be rejected by the Indian government.

Srivastava ends with a strict message to the Government of India:

“If we do not reduce production costs, if we do not improve infrastructure and regulatory stability, we will stay on the sidelines. The new US -China Agreement is Damage Management – No Solution. India must play long -term. “