India’s economy is stronger than Trump thinks

India has long benefitted from geopolitical arbitrage, maintaining working relation ships with Russia, the United States, and Europe.

- SHANG-JIN WEI

But this delicate balancing act is nowbeingtested bya series of policy shocks delivered by US President Donald Trump's administration. These disruptions, unlikely to ease anytime soon, raise a critical question: Can India retain its status as the world’s fastest-growing major economy?

The most urgent challenge facing Indian policymakers is weathering the escalating trade war. In August, Mr Trump imposed a 50 per cent tariff on Indian imports, citing the need to reduce India’s trade surplus with the US and punish the country for its massive purchases of Russian oil. Adding to the pressure, Mr Trump has urged the European Union and other G7 countries to take even harsher steps — namely, to impose a 100 per cent tariffon imports from India and China.

Mr Trump's decision to hike H-1B visa fees to $100,000 represents yet another blow to India’s economy, particularly its IT services industry — one of the country’s most dynamic growth engines. Currently, Indian nationals account for more than 70 per cent of all H-1B holders, with most of them working in IT or technology-related sectors. Given this, it’s hardly surprising that the share prices of Indian companies like Tata Consultancy Services, Infosys, and Wipro, which rely heavily on H-1B visas toaccessthe US market, declined following MrTrump’s announcement.