Narendra Modi vows ‘self-reliant India’ in wake of Donald Trump’s 50% tariff

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1. SS: Indian Prime Minister Narendra Modi has vowed to build a “self-reliant India” and announced tax and regulatory reforms to benefit businesspeople and the middle class in his first major speech since the US imposed 50 per cent tariffs on the country.

   “I want to tell our citizens, our youth, and everyone who understands the power of technology, that by the end of this year, ‘Made in India’ semiconductor chips will be available in the market,” said Modi, who was clad in an orange turban and a scarf in the national colours of orange, white and green.

   The rift between India and the US, its largest trading partner, has plunged their expanding strategic partnership into its worst crisis in decades, and has stunned many Indians, rekindling distrust of the US and the west in a country that has a long-standing friendship with Russia.

   “The Americans are making it very hard for India with their public pressure campaign,” said C Raja Mohan, a visiting professor at the Institute of South Asian Studies in Singapore. “As the leader of a very large nation, Prime Minister Modi cannot be seen as succumbing to those pressures.”

2. Wasn’t Make in India his thing in late 20s?

3. Two biggest challenges for them to work on in the next few years: Semiconductor in the less than 7nm range and jet engines- Indians have gotten good at building fuselages etc for their jets but their jets/gas turbines has been a monumental problem (Kaveri Engine has been riddled with issues).

   Of course this is assuming, they are able to improve infrastructure (roads) and reduce bureaucracy around approving businesses. They have gotten private players in the defense industry which was a big NO NO until 15 years ago but they need to get on an overdrive sooner rather than later

4. 20nm chip?

5. This guy has been yapping about this forever. He should focus on not rigging the elections first

6. India can not rely in US as everyone has already experienced. But getting cosy with China would be like sleeping with enemy.

   India can rather rely on Israel, France or Russia. As none of them has any particular affinity for Pakistan. But China is a different ball game altogether.

7. Nations are learning exactly the wrong lessons from all this tariff business.

   “Self-reliance” is stupid and makes a country poorer. India already puts enormous and unsustainable tariffs on imports. This has been a longstanding multidecade policy that stifled Indian productivity. It took a major economic crisis in the 1990s for India to finally open up its markets (at least a little bit); if India really wants prosperity, the approach should be to open the markets further, not close them again.

   This is a lesson I think no one in the world trusts anymore — *any reduction in tariffs, even if it isn’t reciprocated, is beneficial for a country*.

   The only countries in the world that have come close to “self-reliance” are places like North Korea and Cuba, which burn wood for ancient steam engines and where famines are a way of life — they are not countries any sane person would want to emulate.

8. I genuinely don’t understand Trump’s grand strategy or foreign policy behind all of this. Why is he pressuring India to be more self-reliant and independent by hurting their pride and economy, when America needs India to counter and prevent China’s dominance in Asia? Trump will be studied for decades by international politics students as an example of why it’s wrong to assume all world leaders are rational actors.

9. He has been talking about self reliance for a decade now but all we are seeing on the ground is rampant protectionism in its name. For example, India imports 90% of necessary oil, has 0 active lithium mines, does not have reliable power even in tier 1 cities, yet all kinds of non tariff barriers have been imposed on lithium batteries.

   Sensible policies are the need of the hour, especially with Trump tariffs which will deeply impact MSMEs, bravado will get him nowhere. India has a once in generation opportunity to industrialise during the strategic competition between US & China, but with the limited resources and capital availability reforms & concentrated bets in specific sectors are needed instead trying to be the jack of all rates. For example, instead of building a government GPU cluster or formulating a ‘Datacenter Policy’ which will be outdated before it even becomes law, reduce GST on GPUs (18%), Solar (12%) and BESS (20% BCD + BIS barriers), invest heavily in transmission infrastructure & energy generation.

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