Trump's Tariffs Are a Wake-Up Call for India: Go for Reforms

India's best bet is to revive liberalization and forge new trade ties

- ANDY MUKHERJEE

U.S. President Donald Trump's 'Liberation Day' package of tariffs is being interpreted in India in three different ways. The immediate reaction is relief mixed with schadenfreude: At 26%, the tax on India is not the slap on the wrist that diplomats in New Delhi would have hoped for, especially after making concessions to Elon Musk's Tesla and Starlink as well as to Alphabet and Meta. But that barrier is at least less severe than China's 34% and Vietnam's 46%.

The second view, popular among geopolitical analysts, is that this is nevertheless a betrayal of an important ally: Is it fair to be punished like this for agreeing to be America's bulwark in Asia against China's rising dominance? Has India's Narendra Modi administration erred in placing too much trust in his friendship with Trump, and by refusing technology and capital from Beijing?

The final opinion, which some businesspeople hold privately, is that the White House's shocker on trade is a once-in-a-generation opportunity: It can help resolve an unfinished political debate from the early 1990s on just how open the Indian economy must be, to whom, and for what.