India Poised to Convert Tariff Threat into Self-Reliance

PM Modi has kept a cool head despite all the tariffs being thrown in his direction by the US administration and has resisted the temptation of adopting a tit-for-tat approach.

- M.D. NALAPAT

Work has already begun on further unlocking the potential of the immensity of talent in India in diverse fields. The economic crisis that came to a head during the period when V.P. Singh was Prime Minister of India in 1989-90 was the catalyst behind the Narasimha Rao reforms of 1991 and 1992. In the same way, although on a much larger scale, Prime Minister Narendra Modi is looking at the tariff tirade of President Trump directed at India as not a threat as much as it is an opportunity for disseminating Atma-Nirbharta (self-reliance) throughout different sectors of economic activity in what is already the third largest economy in the world in Purchasing Power Parity terms.

The US is more than the White House, and the clouds over the trade relationship caused by the Trump storm are not affecting the welcome given to investment from the US, especially in highly technical fields. Apple is producing more in India not because of the tourist attractions of the country, which admittedly are many, but because of lower costs and an abundance of numbers and talent within the workforce. President Trump, with characteristic self-confidence, has been seeking to bend the laws of the economics of manufacturing to his will. How long such a quest will last is unknown, but given the harm it could cause to the US economy, it is unlikely to last long. From now onwards, the emphasis will be on the intermeshing of technology and increasing production in India where advanced systems presently imported are concerned.