India’s response to U.S. tariffs under the administration of former President Donald Trump has been met with skepticism, as economist Mihir Sharma highlights concerns about overconfidence in the country’s trade policies. While nations worldwide have shown visible apprehension regarding protectionist measures, India’s policymakers appear optimistic about their trade standing despite Trump’s repeated criticism of India as “one of the highest tariffing nations in the world.”
Sharma suggests that India may be placing undue faith in a prospective trade deal promised during Prime Minister Narendra Modi’s visit to Washington. However, with new tariffs set to take effect, there is no indication of special concessions for India. This situation underscores a broader pessimism regarding India’s manufacturing sector, as experts believe the country has struggled to achieve global competitiveness in cost and quality.
Rather than focusing on improving efficiency, Indian policymakers seem to be relying on geopolitical leverage and trade negotiations to compensate for manufacturing setbacks. Sharma warns that this approach may not be sustainable, emphasizing that long-term success requires producing goods at competitive prices and quality standards rather than seeking diplomatic shortcuts.
Canada’s Concerns Over Election Meddling
In a separate development, Canada has raised concerns that China and India might attempt to interfere in its upcoming elections scheduled for April 28. According to the Canadian Security Intelligence Service, hostile foreign actors are increasingly using artificial intelligence to influence political outcomes. While much of the suspicion is directed at China, tensions between Canada and India have also escalated in recent years.
Canada expelled six Indian diplomats in 2023 over alleged involvement in activities targeting Sikh separatists within Canadian borders. This diplomatic strain further complicates trade and political relations between the two nations, with potential implications for future cooperation.
India Lifts Rice Export Ban to Boost Agricultural Trade
Amid these geopolitical tensions, India has lifted restrictions on rice exports to strengthen its agricultural trade and boost economic growth. As the world’s largest rice exporter, India had imposed export limits in 2022 due to concerns over supply shortages following the economic fallout of Russia’s war in Ukraine. The recent policy reversal aims to double agricultural exports to $100 billion by 2030, up from $48.15 billion in the 2023-24 fiscal year.
This move is expected to reshape global rice markets, pressuring rival exporters like Pakistan, Vietnam, and Thailand, who had temporarily filled India’s market share. African nations, long reliant on Indian rice, stand to benefit from lower prices, while East Asian producers of animal feed and ethanol may also see positive impacts from India’s increased exports. With these shifting trade dynamics, India faces both opportunities and challenges. While it seeks to reclaim its dominance in agricultural exports, its approach to global trade relations and manufacturing competitiveness will be crucial in determining its long-term economic success.
