Trump rates may force India to review Viksit Bharat Playbook

Copyright © HT Digital Streams Limit all rights reserved. Economics where there is smoking can be opportunities. With the US imposing partial reciprocal rates on imports from India and stiffer duties on goods from various other countries, the focus of New -Delhi is on the introduction of new schemes and the change of existing to further encourage manufacturing. Summary India treats the US steep reciprocal rates not only as a challenge, but as a strategic opening-which regains its manufacturing playbook, incarcerating incentives and fast-tracking trading transactions to turn global disruptions into a growth opportunity. New Delhi: In the immediate aftermath of the new US rates, India’s reaction was twofold: looking for new opportunities in the changing world order and re-evaluating the manufacturing strategy. US President Donald Trump’s additional 26% tariff on Indian imports in the US hits against the protection of the trade union offered by the government to household products, from competitive imports – one of two important elements of the country’s manufacturing strategy; The other is incentives linked to production. The two elements are the key to Prime Minister Narendra Modi’s vision to make India a developed people – or Vikksit Bharat – at 2047, a century since independence. Trump’s administration recalibrated his reciprocal tariff on India on Friday (Thursday in the US) to an additional 26% levy on a series of commodities starting from April 9, from the 27% increase announced on April 2, as it corrected its trade deficit calculations. Read also | Trump’s reciprocal rates: India is supporting economic ripples “We believe that the reciprocal rates on India and other Asia countries can create an opportunity for India to draw up his manufacturing capabilities,” said a government official who spoke on condition that he was not mentioned. There is a strong possibility that manufacturing firms in countries such as Vietnam and Thailand may consider moving to India to take advantage of lower tariff and incentive benefits, the official said. The US imposed additional 46% tariffs on Vietnamese imports in the US, and 36% on products sent from Thailand. “We focus on increasing domestic manufacturing, which will lead to employment generation. If necessary, we are open to introducing new schemes or changing existing to further stimulate manufacturing,” the official said. Arvind Virmani, a member of the Niti Aayog and former chief economic adviser, said India’s efforts to achieve confidence and its production-linked incentive scheme, which help with adding value to the domestic manufacturing sector, will continue to develop. “The Atma Nirbhar (confidence) policy is sensitive, both for changes in the external environment and for lessons arising from domestic performance,” Virmani said in response to an email inquiry from Mint. “It is gradually adapted to address new problems and opportunities and will continue to develop.” Virmani said that a key element of India’s manufacturing match plan is an important element of India’s manufacturing contest plan, which was an important part of the trade union government. The focus has shifted from FTAs ​​over the past decade with countries that are India’s real or potential competitors to countries whose economies are supplementary, he added. “Reducing rates on manufactured goods is a key element of these FTAs ​​with a view to developing competitive, reliable supply chains. The FTAs ​​negotiating with the UK and the EU, and the Bilateral Trade Agreement that is negotiated with the US, will help this goal to promote this goal,” Virmani said. Former India chief statistician Pronab Sen said: “India needs to analyze developing trading patterns, identify other countries’ response to US tariff increases, identify opportunities and fill the gaps.” US exports may face increased duties in the countries against Trump’s reciprocal rates, providing an opportunity for India to leverage the markets, Sen. Friday explains that China has returned to the US with an additional 34% tariff on US imports in the country, which has the imposition of 34% on Chinese goods in line with the tariff war. However, Sen added that emerging protectionism in world trade could be a transitional phase and that India should drive strategically from this. Read also | For Mani, US rates on China, Thailand, made possible for the export of India. For India’s PLI scheme, Virmani pointed out the reactions of the Union government “to global challenges, emerging opportunities and expanding the basis of mobile exports, to encourage electronic components and other inputs and intermediate products”. The PLI scheme “will continue to develop to promote supply chains for complex, network products such as electronics, semiconductors, instruments, machinery and equipment,” he said. Sen added that targets set under India’s production -linked incentive scheme can be reviewed in light of the absorption capacity of the domestic market and the global conditions of demand. The finance and trade ministries did not respond to inquiries sent by email on Thursday. Virmani said that the direct impact of the US reciprocal rates on most market economies would be minimal. “However, every country feels the effect of increased trade policy uncertainty over the past few months. World trade, FDI (foreign direct investment) and GDP growth will all be affected,” the economist said. “It will have a small indirect effect on India, given our low trade dependence.” In the short medium term, the impact of differential US rates will depend on the commodity and relative rates on competitors, he added. Goods exempt from reciprocal rate, for example pharmaceutical products, will have little or no effect. And for products in which India’s closest competitors come from South, Eastern and Southeast Asia, the demand for Indian goods will increase, Virmani said. Read also | India quickly watches trader with us amid higher tariff pressure on Asian opponents “In the medium term, the negative factors are minimized to the first time of 2025 to the first phase of the US India BTA. That said, the latest report by the US trade representative has labeled the latest report of the national trade estimate in the national trading estimate of various Indian policies, including ‘Make in India’, as trade barriers, even if India and the US were discussing the bilateral trade agreement, a proxy for a free trade agreement. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Trump Mint Specialies