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IOL News
4 days ago
- Business
- IOL News
India's bold economic play: Adapt or lose!
Director of the National Gandhi Libray from New Delhi,India Professor Annamalai Alagan addresses guests at the 132nd anniversary of Mohandas Gandhi forcibly ejected at the Pietermaritburg railway station. New Delhi has chosen a different path: swift recalibration, strategic diversification, and an unflinching focus on long-term resilience. Image: Rajesh Jantilal / File IN THE grand theatre of global economics, protectionism and Trump's Economic Nationalism, which have reshaped global trade, India has once again demonstrated why it remains one of the most adaptive players in the Global South and BRICS+ nations. The recent tariff shocks unleashed by the Trump administration, which have been boisterous, sudden, and strategically disruptive, have sent weaker economies into a spiral of retaliatory rhetoric or defensive stagnation. But India, true to form, responded with the quiet pragmatism of a nation that understands the oldest rule of economic survival: adapt or perish. As the Greek philosopher Heraclitus once declared: 'The only constant in life is change.' India, a cornerstone of the BRICS Plus bloc, seems to have internalised this wisdom better than most. While Washington's nationalist and protectionist trade policies have forced many nations into reactive posturing, New Delhi has chosen a different path: swift recalibration, strategic diversification, and an unflinching focus on long-term resilience. For Africa, a continent still wrestling with the ghosts of colonial era resource dependency and sluggish industrialisation, India's playbook offers not just inspiration, but an urgent blueprint. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ When the US government under Donald Trump announced aggressive tariffs on Indian exports, the immediate reaction in some quarters was one of outrage. After all, India and the US have enjoyed a steadily deepening trade relationship, with bilateral exchanges exceeding $100 billion (about R18 trillion) in recent years. Yet, rather than succumbing to knee-jerk protectionism or hollow threats, India's policymakers went to work quietly, methodically, and with the precision of a chess grandmaster anticipating the next move. Reports from *Economic Times* reveal that New Delhi is already crafting a multipronged response to counter stiff US tariffs through enhanced export incentives, tax rebates for manufacturers, and a renewed push to deepen trade ties with Europe, Africa, and Southeast Asia while continuing trade negotiations with Washington. This is not the behaviour of an economy caught off guard; it is the hallmark of a leadership that sees crisis as an opportunity for growth and its national interest in guarding its every move. Compare this to the trajectory of many African economies, where trade policy often remains shackled to raw material exports and reactive rather than proactive adjustments. South Africa, once the continent's undisputed industrial powerhouse, has seen its manufacturing base erode over decades, leaving it overly reliant on mineral exports even as global demand patterns shift, while still beholden to Cold War slogans. The lesson? Economic resilience is not about the absence of shocks, but the capacity to diversification as an end and not a means to an end. India's agility in the face of US trade pressures is not happening in a vacuum. As a key member of BRICS+, New Delhi has not only diversified its trade partnerships but has also made strategic inroads into Africa's critical industries. Indian firms now dominate the continent's steel sector, control vast iron ore mining operations, and have positioned themselves as leading suppliers of lab-grown diamonds. This shift has sent shockwaves through traditional diamond producers like Botswana, which failed to anticipate the global consumer shift away from organic diamonds. While Botswana struggles to adjust to the reality that 'diamonds are not forever', India's lab-grown diamond exports are booming, proving once again that foresight and adaptability define economic survival. This is not just about circumventing tariffs; it's about rewriting the rules of engagement in a world where economic power is no longer monopolised by a handful of Western capitals. For Africa, the implications are profound. The continent remains the world's last great frontier of consumer market growth, yet too many of its economies remain trapped in the colonial era role of raw material suppliers. If India, a fellow developing economy, can reposition itself as a global manufacturing and services hub while navigating US protectionism, why can't Africa's industrial bases do the same? Africa's struggle with diversification is not for lack of opportunity. The African Continental Free Trade Area promises to be the world's largest single market, yet progress remains frustratingly slow. South Africa, despite its historical industrial advantages, has seen its manufacturing sector shrink from 20% of GDP in the 1990s to just 12% today. Instead of leveraging its early lead into sustained value-added production, the economy remains tethered to mining exports, a vulnerability starkly exposed whenever commodity prices fluctuate. India, meanwhile, has spent decades building economic shock absorbers. When the 1991 balance of payments crisis struck, it responded with sweeping reforms that unleashed its private sector. When the 2008 financial meltdown hit, it doubled down on domestic consumption. Now, faced with Trump's tariffs, it is accelerating its shift toward alternative markets and high-value exports. The difference is not just policy, but mindset. India operates with the understanding that global economic conditions are perpetually in flux, and survival belongs to the agile. Africa, by contrast, has often treated diversification as an academic ideal rather than an immediate imperative. The result? While India's GDP has multiplied fivefold since 2000, too many African economies remain hostage to the same commodity cycles that have dictated their fortunes for a century. The message for Africa is clear: The time for passive reliance on raw material exports is over. India's response to US tariffs proves that economic sovereignty is not about defiance, as we have seen with Advanced Economies such as Japan and Singapore, but about diversification, options and adaptability. If New Delhi can cultivate new trade alliances, incentivise value-added production, and navigate geopolitical headwinds without losing momentum, so too can Africa if it chooses to. As the world moves toward multipolar trade blocs and competing spheres of influence, India's example offers a masterclass in strategic adaptation. Trump's tariffs may have been designed to force concessions, but New Delhi's response has been something far more powerful: a demonstration of resilience that Africa would do well to emulate. In the end, Heraclitus was right: change is the only constant. But the real question is: In the Global South, who will change or perish? India, it seems, already has its answer. Africa must now find its own. * Phapano Phasha is the chairperson of The Centre for Alternative Political and Economic Thought. ** The views expressed here do not reflect those of the Sunday Independent, IOL, or Independent Media. Get the real story on the go: Follow the Sunday Independent on WhatsApp.
Arab News
17-05-2025
- Business
- Arab News
Strategic posturing in a multipolar world
US President Donald Trump's tour of the Gulf was far more than a ceremonial engagement. It was a choreographed exercise in strategic projection: part arms bazaar, part geopolitical theater, and part economic sales mission. The timing was critical. US influence in the Middle East is no longer a given, and the region's aspirations have outgrown their historical dependencies. With China extending its reach and Gulf monarchies pursuing bold visions of transformation, the visit tested Washington's continued relevance in a world increasingly defined by multipolarity. True to his brand as a dealmaker, Trump placed commerce at the center of his visit. Announcements of multibillion-dollar agreements dominated the headlines, ranging from expansive arms sales to Saudi Arabia and the UAE, to infrastructure investments, technology transfers, and fledgling partnerships in artificial intelligence and renewable energy. For Trump, the logic was straightforward: These deals promise jobs back home, project strength abroad, and reinforce his campaign narrative of economic nationalism and American exceptionalism. For Gulf states, Trump's visit reaffirmed their centrality to US strategic calculations. In a region where optics carry geopolitical weight, his presence underscored a clear message: The US is still engaged, and transactional loyalty remains a currency that yields dividends. Gulf leaders extracted more than symbolism. The visit aligned with their sweeping national agendas, from Saudi Arabia's Vision 2030 and the UAE's industrial diversification to Qatar's long-term investments in energy, education, and technology. Trump's endorsement provides political cover for these domestic overhauls, while insulating them from Western scrutiny. Yet this is not a return to Cold War binaries. Gulf capitals understand the precariousness of relying too heavily on American guarantees, particularly in an era of growing US isolationism. Their strategy is pragmatic: Hedge alliances, broaden partnerships, and deepen autonomy. Looming behind Trump's Gulf tour was the expanding shadow of China. Over the past decade, Beijing has embedded itself across the region, investing in ports, logistics, digital infrastructure, and energy supply chains. It offers rapid deployment of capital, infrastructure efficiency, and diplomatic noninterference — an attractive alternative to the conditionality of Western engagement. US President Donald Trump's tour of the Gulf was far more than a ceremonial engagement. It was a choreographed exercise in strategic projection. Dr. John Sfakianakis The Gulf is not forced to choose between Washington and Beijing. It is leveraging both to extract maximum strategic value. Trump's mission was not to displace China but to reassert America's competitive edge by offering what Beijing cannot: elite military capabilities, intelligence-sharing frameworks, and the legacy of long-term security cooperation. The defense and tech-focused agreements signed during this trip signaled a renewed American willingness to contest influence in the region, not relinquish it. One question haunts the cascade of contracts: How will Gulf states finance these commitments amid persistently low oil prices? Although regional economies have amassed significant sovereign wealth over the past two decades, fiscal pressure is mounting. Budget deficits are widening, subsidy cuts remain politically sensitive, and diversification efforts are still nascent in terms of revenue generation. The answer, for now, lies in the careful management of reserves, reprioritization of capital spending, and a bet that the return on strategic alignment with the US, in terms of security guarantees and investment access, will outweigh the short-term economic strain. But the risk is real; overextension, particularly in a volatile oil market, could jeopardize long-term fiscal stability and delay domestic reforms agendas. Although not headline news during the visit, energy politics remained a critical undercurrent. Military alliances and diplomatic alignment invariably shape oil-production strategies. A revitalized US-Gulf relationship could yield informal coordination on output policy, especially in moments of global economic turbulence. Yet the more profound shift is structural. Gulf economies are accelerating their transitions away from hydrocarbons, altering the very foundations of their relationships with the US. Investment, innovation and industrial collaboration are becoming the new pillars of engagement. This transition will redefine global capital flows, diminish the centrality of the petrodollar, and reshape energy diplomacy for decades to come. Tactically, the visit delivered results. Trump walked away with deals he can market as economic and diplomatic victories. Gulf leaders secured visibility, AI deals, investment, and a reaffirmation of their strategic relevance. But deeper uncertainties persist. Many agreements are aspirational or on the long-term horizon and could be derailed by future US policy reversals. Tying regional strategy too tightly to a single, polarizing figure risks instability should the American political landscape shift. More fundamentally, the visit did not reverse the trajectory of an increasingly multipolar world. The US is now one player in a crowded strategic arena that includes China, Europe, and a rising class of autonomous regional actors. Trump's Gulf visit reinvigorated a crucial relationship. But it did not end the game. That contest continues to unfold — in Washington, in Beijing, and in the Arab Gulf capitals of Riyadh, Abu Dhabi, and Doha.
