Latest news with #RakeshMohanJoshi
Mint
3 days ago
- Business
- Mint
Trade threat: When the going gets tough, the tough must get going
Rakesh Mohan Joshi India's response so far to the US trade reset has been well calibrated. This reflects the confidence that our economy can emerge stronger. We need a cohesive strategy based on empirical research to defend our interests. India's survival strategy in the Trump era requires preparedness based on meticulous empirical research to defend our interests. Gift this article The US imposed an additional 25% import tariff on India via an executive order on 6 August, accusing India of fuelling Russia's war machine through its energy imports from the country. Though it is yet to go into effect, this is over and above the 25% 'reciprocal tariff' already levied. Earlier most-favoured-nation tariffs remain in place, making most Indian products uncompetitive in the American market. Such reciprocal, differential and secondary tariffs based on criteria other than economic merit—with geopolitical issues thrown into the decision mix—are unprecedented, baffling economists and policymakers the world over. The US imposed an additional 25% import tariff on India via an executive order on 6 August, accusing India of fuelling Russia's war machine through its energy imports from the country. Though it is yet to go into effect, this is over and above the 25% 'reciprocal tariff' already levied. Earlier most-favoured-nation tariffs remain in place, making most Indian products uncompetitive in the American market. Such reciprocal, differential and secondary tariffs based on criteria other than economic merit—with geopolitical issues thrown into the decision mix—are unprecedented, baffling economists and policymakers the world over. History is witness to India's unparalleled capacity to emerge victorious from such challenges, proving that 'when the going gets tough, the tough gets going'. For instance, during the global financial crisis, when advanced economies like the US contracted, India posted GDP growth of 6.7% in 2008-09. Though this was lower than the 9.8% expansion in 2007-08, it was far less of a crisis than what other economies experienced. The World Bank has applauded India for its poverty alleviation programme, which has pulled over 171 million people out of extreme poverty between 2011 and 2023. This has reduced the number of people living in extreme poverty from 16.2% to 2.3% during the period. US President Donald Trump has also called India's economy 'dead' despite its clocking 6.5% growth in 2022-25, more than twice the US expansion pace in 2024. Notwithstanding worldwide economic headwinds, manufacturing activity has stayed robust in India, as reflected in its purchasing managers' index (PMI) reading—it was 59.1 in July, well above the 50 mark that separates expansion from contraction. In contrast, the PMI reading for the US was 49.8 and for China at 49.5 last month, pointing to a contraction in activity. In addition, India's robust foreign exchange reserves of $698 billion demonstrate the sound status of its economy. Pakistan, with which the US has been getting cosy lately, has reserves of merely $20 billion. There's a robust economic rationale for Sovereign India's trade with Russia: India maintains independent relations with different countries in today's multipolar world that is riddled with cobweb-like complexities on a range of economic and geopolitical fronts. India has adhered to its non-aligned strategy and is at ease working with nations that are mutually in conflict. Russia has been India's time-tested strategic partner from the Soviet days, with substantial defence and trade collaboration. Also Read: World trade war: Why hasn't this risk raised an alarm so far? The US accuses India of selling it petroleum products refined from imported Russian crude oil and using the receipts to pay for those oil shipments. But the reality is that India is heavily dependent on imports to meet its domestic energy needs. It buys over 88% of its crude supply from overseas. To ensure steady shipments, Indian oil companies Nayara Energy and Reliance Energy have long-term supply contracts with Russian oil major Rosneft. Due to heavy discounts on Russian crude that followed Western sanctions for its armed action against Ukraine, Russia has become India's largest oil supplier, shipping 1.76 million barrels per day, or 36% of India's overall imports of the commodity in 2024-25, up from under 0.1 million barrels per day in 2020-21. This 18-fold increase over the last four years saved India an estimated $11 billion from April 2022 to March 2025. India's calibrated reaction should not be mistaken as weakness: Amid Trump's consistently inconsistent threats of reciprocal tariffs and open arm-twisting ever since he came to power, countries across the world are finding it hard to frame a coherent trade strategy. Trade deals and tariff negotiations are being guided by diverse non-economic issues, ranging from immigration, drug smuggling and challenges to the US currency to trading with countries in Trump's disfavour, such as Russia, Venezuela and Iran, apart from other demands that seem to pander to his whim and fancy. In such a rapidly changing tariff environment, India has exhibited consistency and adopted a cautious approach, leaving itself room for negotiation, unlike others like Brazil and China. Such a restrained response must, however, not be interpreted as a sign of weakness that the US establishment may seek to exploit. Despite Trump's tariff strikes, which have been far from rational, India's exports to the US grew 22.2% in April-June, the fastest in many years, to $ 25.5 billion; imports from the US grew 11.7% to nearly $12.7 billion. India recently signed a comprehensive and balanced trade deal with the UK that not only demonstrates how to arrive at agreements based on mutual sensitivities and complementarity, but also presents a template for future deals. However, the US's reset of trade ties, levying a wide range of tariff rates for entry to its market while securing duty-free access for American goods to the markets of its trade-deal partners, has unsettled trade pundits, economists and leaders alike. India's survival strategy in the Trump era requires preparedness based on meticulous empirical research to defend our interests. Our strategy will have to evolve in dynamic adjustment with a rapidly changing world trade order. The author is vice-chancellor, Indian Institute of Foreign Trade Topics You May Be Interested In
India Today
16-05-2025
- Business
- India Today
Global trade, Indian roots: Indian Institute of Foreign Trade launches campus in Dubai
The Indian Institute of Foreign Trade (IIFT) is set to open its first overseas campus in Dubai, the Ministry of Commerce and Industry announced on Friday. This marks a major step in implementing the internationalisation goals of the National Education Policy (NEP) Dubai campus has received approvals from key bodies including the Ministry of Education, Ministry of External Affairs, Ministry of Home Affairs, and the University Grants Commission (UGC).advertisementThe Dubai centre will offer the same academic standards and training as the Indian campuses. It aims to serve international students as well as the Indian community based in the programmes will focus on international trade, economics, and business policy. According to the ministry, this move will help India strengthen its global academic offered will include the MBA in International Business, MA in Economics (Trade and Finance), Executive Diplomas for working professionals, and doctoral programmes. Admissions will follow the current process of entrance exams, followed by group discussions and AND OTHER DETAILSEstablished in 1963, IIFT currently runs its main campuses in Delhi and Kolkata. This will be the first time the institute sets up operations outside Vice Chancellor Prof Rakesh Mohan Joshi said the Dubai campus will reflect the institute's academic vision while adapting to the needs of the global added that the expansion is part of India's strategy to connect education with diplomatic and trade Dubai campus is expected to start functioning soon. It will run both full-time and executive courses designed to meet the region's industry requirements and business initiative follows similar global moves by other Indian institutions, such as IIM-Ahmedabad, and marks a growing trend in India's higher education reaching beyond borders.
