With the United States slapping an additional 25% tariff on Indian goods—set to take effect on August 28—India faces a significant trade challenge. The hike, announced by U.S. President Donald Trump on August 7, is a direct response to India’s continued purchase of oil from Russia amid the ongoing Ukraine conflict.
Once implemented, the new tariffs could raise total duties on some Indian exports to as high as 50%, making it one of the steepest ever faced by an American trading partner. The move also comes at a time when trade talks between the two countries have stalled, with no clear resolution in sight.
While the tariff hike poses a serious risk to India’s export competitiveness, several leaders in the Indian business community are urging the country to view this crisis as a chance to reset and strengthen its economic foundation.
One of the most vocal among them is Anand Mahindra, Chairman of the Mahindra Group. In a thoughtful post shared on social media, Mahindra encouraged India to seize the moment, pointing to the “law of unintended consequences” and offering examples of how other nations are using global disruptions to fuel long-term gains.
Global Lessons, Local Inspiration
Mahindra highlighted how countries like France and Germany have used rising global tensions to boost defence spending—moves that may help reinvigorate their economies. He also pointed to Canada’s renewed efforts to dismantle internal trade barriers between provinces, aiming to build a more unified and resilient domestic market.
Drawing parallels, Mahindra asked, “Just as the 1991 forex reserves crisis triggered liberalisation, can today’s global ‘Manthan’ over tariffs yield some ‘Amrit’ for us?”
Two Key Areas for Immediate Action
1. Ease of Doing Business:
Mahindra emphasized the urgent need for India to go beyond incremental reforms. He called for the creation of a true single-window clearance system for investments, suggesting that a group of forward-thinking states could pioneer the effort. With global companies seeking stability and simplicity, India has the chance to present itself as a trustworthy and efficient destination for foreign investment.
2. Boosting Tourism:
Calling tourism an underutilized asset, Mahindra urged India to focus on this sector as a major source of foreign exchange and jobs. He proposed fast-tracked visa processing, better infrastructure for tourists, and the development of dedicated “tourism corridors” with clean, safe, and well-maintained environments. These model areas could serve as blueprints for nationwide tourism development.
Building Resilience Through Broader Reforms
Alongside his two core proposals, Mahindra also outlined several broader measures to help India navigate the current global economic turbulence:
- Support for MSMEs: Provide liquidity and credit support to small and medium businesses that form the backbone of the economy.
- Speed Up Infrastructure Projects: Accelerate timelines for roads, ports, railways, and digital infrastructure.
- Expand Manufacturing: Double down on Production Linked Incentive (PLI) schemes to boost domestic output.
- Lower Input Duties: Reduce import taxes on key raw materials and components to make Indian manufacturing more globally competitive.
Turning Setbacks Into Strategy
Mahindra’s message was ultimately one of resilience and proactive thinking. “Let the unintended consequences we create be the most intentional and transformative ones of all,” he wrote, urging India to harness adversity for long-term national strength.
As the global landscape shifts, Mahindra concluded, India must focus inward—not with isolation, but with intention. “We cannot fault others for putting their nations first. But we should be moved to make our own nation greater than ever.”
Image Source: Getty Images
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