Turning Trade Turbulence into Opportunity: India’s Response to Trump’s Policies
In this article, the authors Abhishek Anand, Sudipto Guha, Rishiraj Pathak, and Ex Chief Economic Advisor Arvind Subramaniam.
Trump’s trade policies have historically been focused on reducing trade deficits and protecting domestic manufacturing. This has meant higher tariffs on imports, affecting countries reliant on U.S. markets. India’s manufacturing sector, already struggling with competitiveness, could face increased pressure if U.S. tariffs make Indian exports less attractive.
Additionally, the agriculture and food sectors could see fluctuations due to trade shifts. India’s agricultural output, though robust, is often subjected to tariff barriers in major economies, making it vulnerable to policy changes in the U.S.
Turning Disruptions into Opportunity
Instead of reacting defensively, India could use this shift to embrace a more open and competitive trade regime. Here’s how:
- Reforms in Manufacturing: India must push for lower applied tariffs to encourage foreign investment and make manufacturing more export-competitive.
- Leveraging the China+1 Strategy: With Western nations looking for alternatives to China, India can position itself as a preferred destination for manufacturing.
- Strengthening Digital and Services Trade: While manufacturing is important, India’s digital and technology sectors remain strong. Instead of focusing solely on labor-intensive exports, India can expand its influence in global technology, software, and services.
- Strategic Trade Partnerships: Strengthening trade ties with the EU, ASEAN, and other emerging economies can help India diversify its export markets and reduce reliance on the U.S.
India’s Path Forward
The evolving global trade scenario, while challenging, presents a chance for India to restructure its trade policies and enhance competitiveness. Instead of being reactive, India can use Trump’s trade stance as a catalyst for deeper economic reforms, making the country a stronger player in global trade.
Latest news that’s coming in is: America wants zero tariffs across all products except agricultural produce. How do you think India can shape up its policy with USA which currently is in a rapid tariff spree?
