U.S. tariffs are good for India
They will help bridge the chasm
Finally for someone to go up
Someone has to come down.
Many of us have been thinking about the end game that will emanate from US Tariffs. Pretty much everyone is in agreement that they will lead to a reduction in U.S. imports (and consequently exports of corresponding countries). It is now a matter of time before countries either surrender to Uncle Trump or take on Uncle Sam.
History of mankind says that people don’t take give a walkover easily. So whilst the likes of Japan will succumb, some like India may not. Let’s see where that would take India.
First and foremost Indians would panic and start sending their money home. This would lead to a massive surge in remittances. Probably by usd 100 billion pa. Maybe even more as American salaries in tech areas may go up on account of non availability of local talent.
And at the same time, Indian exports would reduce. Diamond industry for example will collapse. And so will garment fabrication or granite and export. However industries like diamonds and petroleum are dependent on raw material imports. Even the so called lab grown diamond industry imports most of the lab grown crystals are actually imported from Singapore or Israel. Cvd crystal growth is yet to be mastered. It is just cutting and polishing still. So a usd 100 billion reduction is only a usd 20-30 billion reduction in net foreign exchange earned.
It would thus be safe to assume that remittances will more than make up for the loss from exports. Of course there will be a loss in jobs etc- and like ai and everything else – it becomes one more thing for the govt to worry about. So trade deficit etc is not the crisis point.
The real crisis point is in the cyber world. The IiT Alumni Council sought proposals to defeat rogue technologies. One had expected technologies like engineered viruses to be the risk point. However they are not. The really high risk technologies for India are apps like Google maps and WhatsApp. Besides gmail and the cloud storage services like google drive, Apple iCloud and Microsoft one drive. These apps can play havoc with India at multiple fronts – including cyber compromise our position in the event of war or jeopardise our democracy through influencing elections.
It is thus imperative that indian smartphones carry a local OS and only domestic apps be allowed for email, navigation, payments and communications.
We can be a very very stupid country when it comes to looking after our priorities. Just one example of extreme stupidity is Sebi. If you have to pay a fees for some sebi license, they insist on the same being paid via Citibank. Citibank is not even an existing retail bank in India. We have no dearth of domestic banks. Then why on earth would sebi insist on fees being paid through Citibank. It may be negligence or just an oversight. Or really smart marketing or liberal bribing. But the fact remains – it is stupid.