Trump slaps the door - don't admit, map a new trading path, says experts

Copyright © HT Digital Streams Limit all rights reserved. India must now increase industrial security to the same strategic priority that we have given food security and energy security in recent decades, an expert said. (Bloomberg) Summary While US rates may not be final, India should increase manufacturing capacity and focus on exports to Europe and within Asia. New Delhi: India must continue to focus on producing the world, but with a more diversified “US -Plus” export market, even as President Donald Trump’s 25% tariff and an unspecified penalty for trade with Russia vulnerability, experts said. “The latest set of tariff announcements has indeed exposed vulnerabilities in export -dependent growth models, which necessitates a strategic recalibration of the manufacturing framework of India,” says the leader of the partner and economic advisory services leader, Grant Thornton Bharat. ‘Our’ make in India ‘initiative’s emphasis on the scale of production capacity remains fundamentally healthy, but the current trading environment underlines the need for a more nuanced approach centered on innovation-led industrial development. ‘India must now increase industrial security to the same strategic priority that we have given food security and energy security in recent decades, Shah said. The US is now the largest export market in India, followed by the UAE, the Netherlands and the United Kingdom. India focuses on promoting manufacturing in export-oriented sectors such as cell phones, cars and components and pharmaceutical products, especially by offering production incentives. This is supplemented by a calibrated import tariff regime that seeks to gradually increase the addition of domestic value from mere mounting to more complicated operations. Policymakers also hoped to relocate the benefits of a global supply chain of China. However, fresh US rates renew the concern that one of the growth cars, net export, will continue to stand against the wind. The 25% tariff on Indian exports from August 1 would mean that India’s exports would have a higher obstacle in the US market than goods from South Korea (15% tariff rate), the EU (15%) and the UK (10%). “Since trade policies are used by major economies as influence tools, the purpose of industrial confidence must be,” says Shah of Grant Thornton Bharat. “It’s not about import replacement, rather about building economic resilience against external shocks and volatility in the policy.” Sachidanand Shukla, group chief economist at Larsen & Toubro Ltd, described current trade uncertainty as a short -term issue and said the focus should remain on manufacturing -centered development. “It is true that the world is currently in a flood and that some de-globalization has been played in the recent past,” he said. “But India must be negotiations with the US, a partner with other like -minded economies and economic blocks, feed and deeply embedded in the global value chains.” India must keep eyes trained on the utilization of all global opportunities, be it within Asia, which is the fastest growing region, the EU or Latin America, and still trades. to scale up domestic manufacturing capabilities, well-served to build confidence, and it must continue, especially for strategic reasons and also to meet the demand in a growing economy, which has the potential to double its size in six-by-age. Uncertainty in trade relations with the US is a short -term hump. Announced by the US may not be the final result, as we have seen in negotiations with other countries. India’s focus on manufacturing should continue, and we need to make in India and make the world, “Shukla said. The road ahead requires a double approach, says Shah of Grant Thornton Bharat. This involves maintaining India’s trajectory to scale manufacturing while turning to innovation, Shah said.” Value adding on manufacturing, services and emerging technological sectors, “says Shah.” Priority areas include semiconductor design, biotechnology -R & D (research and development), pharmaceutical innovation and precision electronics -domains where we can use MSME ecosystem advanced technology to create worldwide competitive products. News reports and latest news updates on live mint.