Best of BS Opinion: New Delhi balances US trade, terror response and growth

Business Standard

24-04-2025

India and the United States have agreed on the terms of reference for upcoming trade talks, aiming to conclude negotiations by autumn. A more immediate issue is the expiry of the 90-day pause on US tariffs, after which Indian goods will face duties of up to 26 per cent. Indian officials are currently in Washington to speed up the process. Our first editorial notes that this is a chance for India to reassess its own trade policy, streamline regulations, and consider selective liberalisation, especially in agriculture, without waiting for pressure from the US.
The terror strike in Pahalgam, Jammu & Kashmir, which claimed 26 lives, is a direct blow to the region's ongoing recovery. The attack appears calculated to disrupt tourism, which has grown from 13 million visitors in 2015 to 21 million in 2023. Despite a series of earlier attacks on tourists, pilgrims and workers, there remain gaps in security and intelligence. Reports indicate victims may have been targeted by religious identity, which risks inflaming communal tensions. Our second editorial argues that the government must ensure a controlled, strategic response focused on justice and preventing further unrest.
Sonal Varma writes that the tariff-driven global slowdown could reduce India's GDP growth to around 5.8 per cent in FY26, with sectors like jewellery and IT at risk. Inflation remains under control, allowing the Reserve Bank of India space to cut rates by up to 100 basis points. Strategically, India can benefit from realigning supply chains and expanding in mid-tech sectors like electronics and textiles. But it must also develop a strategy for reducing reliance on China, particularly for key intermediate goods, and ensure strong enforcement of trade rules to prevent re-routing.
Meanwhile, Amit Kapoor argues that India's urban renewal cannot depend solely on infrastructure and technology — it requires civic responsibility. With nearly 600 million Indians projected to live in cities by 2036, the lack of citizen engagement threatens public spaces and social cohesion. Rural models of collective decision-making offer lessons, while cities like Indore have shown what civic participation can achieve.