Trump's tariffs will offer India certain advantages, says Chief Economic Adviser V. Anantha Nageswaran

The Hindu

4 hours ago

The reciprocal tariffs unveiled by U.S. President Donald Trump on April 2 could offer India certain tariff advantages compared to other countries, V. Anantha Nageswaran, Chief Economic Adviser to the Government of India, has said.
Dr. Nageswaran was speaking on 'Global economic trends: India's challenges and prospects' at Raj Bhavan here on Tuesday. He said a 90-day 'pause' is on till July 9 with respect to the tariffs, but whatever was announced on April 2 gives India certain advantages, especially in labour-intensive manufacturing areas such as textiles, leather products and chemicals.
'One of the mistakes we all make is looking at the tariffs from only the Indian point of view; 'Oh, now we have a higher tariff!'. But what matters is not just your tariff, it also matters what others face. If your competition is going to face higher tariffs you are at an advantage. And that is what is happening to India in a few areas,' he said.
On energy transition, Dr. Nageswaran urged caution against the unbridled injection of solar and wind energy, which are characterised by intermittency, into the grid. Pointing out that coal will continue to remain critical, he advocated their slower penetration into the grid. While renewables will continue to increase driven by India's commitment to clean energy, it will be done in proportion, he said.
'The world has no precedent of so much solar and wind energy coming into the grids. The grids are not ready for the intermittency. If we need backups for everything, what is the point? It's double the investment cost. That is the challenge.' It is in this context that the Union Budget announcement with respect to small modular reactors and the decision to open the nuclear energy sector to the private sector assumes significance, he said.
In global manufacturing, India should aim to make itself indispensable as China has done over the past 30 years, Dr. Nageswaran said. This assumes significance given the growing uncertainty factor in the global economic scenario which prompts countries to increasingly look inward, and India's high dependence on China for components in vital sectors.
'The vulnerability of dependence on one source for many products will turn much sharper in the coming years. We have to think of what are the other sources we can rely on as an alternative to China,' he said. Given its size, India can develop as a more reliable and trusted alternative source to China, he said. 'Vietnam, Mexico, Cambodia, Thailand and Indonesia lack the size to even take a shot at matching what China has done in the last thirty years. That is our opportunity,' he said.
Speaking on the occasion, Governor Rajendra Vishawanath Arlekar said that, henceforth, Raj Bhavan will not only be for the Governor who resides there. Rather, Raj Bhavan will be a 'Lok Bhavan,' as it is the people's asset, he said.
'Earlier the concept was that Raj Bhavan has to be a secluded place, away from the people and society. The gates of Raj Bhavan were never opened for all of us,' he said.