Wed, 19 Mar 2025

Wed, 19 Mar 2025 Will Trump's tariff war spark big-bang reforms in India?

Could this be a chance for the world’s fifth-largest economy to shed protectionism and open up further?

* India's high tariffs (12% on average) may be a major obstacle in its efforts to increase exports and reduce its trade deficit.
* US President Donald Trump has repeatedly criticized India as a "tariff king" and accused it of being a big abuser of trade ties.
* Despite attempts to shift gears, the Modi government's protectionist stance remains a concern for many economists.
* With growing exports, primarily driven by services, India still runs a significant trade deficit.
* The country has a unique opportunity to shape a new vision for global trade and position itself as a key player in a "re-globalised" world.
* Reducing tariffs could help India create jobs in the manufacturing sector, which is crucial for addressing its large pool of unskilled workers.
* However, there are concerns about dumping, where foreign companies flood the market with cheap goods, potentially harming domestic industries.
* Experts believe that India should capitalize on the unintended consequences of Trump's tariff wars and use them as a catalyst for reforms.
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