The India specific actions of President Trump in the past six months have evoked a varied response from various stakeholders.
· The policymakers have been quite guarded in their response. Prime Minister Modi has rhetorically emphasized on the need to be self-reliant and adopt Swadeshi (Made in India products), but so far, we have not heard any specific policy or plan to counter the US aggression. Most of the concerned ministers and bureaucrats have repeatedly expressed hope that India will manage to finalize an “honorable” trade deal before the end of 2025. The only detail they have shared is that India shall not compromise on the interests of its farmers’ and energy security concerns. Prima facie, the bureaucratic and diplomatic effort is to “restore status quo ante”, to the extent possible.
· Industry associations also seem to be preferring a “settlement” route, whereby the US administration withdraws punitive measures (tariff and non-tariff) and Indian exporters agree to bear some of the reciprocal tariffs.
· The IT services industry seems to be adopting a “take whatever comes on the way and move on” approach; fast reconciling to a situation where the extant H1B visa does not exist. They are apparently working on a broad mitigation strategy, including increasing their US on ground presence, near-shoring, off-shoring to India, sharing the increased cost with clients, etc.
· A handful of entrepreneurs and professionals have suggested that we “exploit this opportunity” to unleash a new round of economic and policy reforms in the country by beginning an “innovation revolution” in the country. Though, most of their views are available in the form of media posts and interviews, and not much specifics are available in public domain.
Overall, my impression is that a large majority of the stakeholders would be delighted if the pre–Liberation Day (02 April 2025) situation is restored by the Trump administration. They would be much relieved, even if reciprocal tariffs are retained and punitive measures like 25% penal tariffs, 100% tariff on branded & patented drugs, and US$1,00,000 fee on H1B applications are revoked. Regardless of all the rhetorics and social media proclamations, the enthusiasm for ushering Reforms 3.0 (after 1991-92 and 1998-99) is much less.
In my view, we should take this opportunity to reinforce the foundation of our economy, add new engines of growth, and make our economy more sustainable. This would require coordinated efforts by the government, entrepreneurs, innovators, local governments, civil society, academia, and industry.
I suggest two level effort to achieve these objectives – (1) Business level efforts and (2) Structural changes
Business level efforts
Trade & Manufacturing
Diversify markets: Reduce reliance on the US by deepening ties with ASEAN, EU, Africa, Latin America.
FTAs & supply-chain corridors: Accelerate trade agreements with EU and UK; expand India-Japan supply chain partnerships.
Technology & Capital
Domestic R&D: Incentivize AI, semiconductor, and biotech innovation through tax breaks and PPP models.
Ease of capital flows: Simplify compliance for foreign investors; fast-track dispute resolution.
Upskilling at scale: Invest in digital skills, advanced manufacturing training, and vocational education.
Geopolitics & Defense
Strategic diversification: Strengthen ties with EU, Japan, and ASEAN to counterbalance US unpredictability.
Defense indigenization: Fast-track Make-in-India defense projects, reducing dependency on US hardware.
Structural changes
While business level efforts improve resilience of the India economy, it may not enhance sustainability of the growth or catapult our growth to a much higher trajectory, that is much needed to attain the goal of “Viksit Bharat (Developed India)” in the next couple of decades. For this we need to implement some structural reforms through transformation of our growth paradigm. In particular, we need to-
· Completely shed the colonial mindset and make our development plans aggressive, forward looking and large;
· Bridge a variety of deficits prevalent in our country – especially growth capital deficit; skill deficit; trust deficit; and compliance deficit;
· Develop a scientific temper as a society, eliminating superstitions, ostentatiousness, intolerance, and ignorance, from our daily life.
· Transform governance structure to minimize corruption.
The following three examples of development initiatives emphasize my points.
· Develop 6 new green field global cities of the size of one Singapore each. Locate these cities in each region (North, West, South, East, central and North East) of the country. Invite top global businesses, infra builders and universities to build these world class fully integrated sustainable and self-sufficient cities in the next 10-15 yrs. These cities should have the best infrastructure; dedicated campuses for top global businesses, especially technology, and research; campuses of top global universities where Indian and foreign students could study. These cities should become global hubs of trade, finance, innovation and model living.
These cities may be managed by a board elected by the representatives of investors, institutions and residents. The board may be fully empowered to formulate rules and regulations regarding labor, property, indirect taxes, and other matters of governance and maintenance of these cities. Once successfully established, states may be encouraged to model their metropolises on these cities.
· Develop 6 new green field global standard recreation and tourism centers, similar to Las Vegas, Macau, Phuket etc. on build operate (BO) basis. These centers must have best in class hospitality, retail and mobility infrastructure. Apply exceptional rules for these centers with regard to alcohol consumption, gambling, hotel management, prostitution etc. The objective should be to divert outbound tourism from India to these centers and encourage inbound international tourist flow. A special armed force may be raised for maintaining law & order in these centers.
Simultaneously, the existing places of tourist interest in the country may be developed in terms of cleanliness, hospitality, accessibility, law & order, etc. The tourists arriving in the special centers may be encouraged to visit these places of historical and cultural importance.
· Religion has always been at the core Indian ethos. Traditionally, it has been the influence of religion that brought the concepts of scientific inquisition, righteousness, moral rectitude, social responsibility, environmental sustainability, debt management, HR management, and just & fair taxation, etc. in the society.
Post Independence the State has been over focusing on micromanaging businesses and ignoring key social issues. This has weakened the core fabric of Indian society. Consequently, places of worship have degenerated from being centers of learning & spiritual evolution to shelters for hatemongers, fearmongers, power seekers, and wealth hoarders. Many of these promote superstitions and block scientific inquiry to the detriment of society at large.
In my view, if we want to make this century belong to India, then Indian State—
o should leave business completely to private enterprise;
o play a much larger role in social awakening and create an enabling environment of mutual trust, self-motivation, empathy and compassion;
o make the Temple (of course including Mosques, Churches, Monasteries, Gurudwaras, Mutts, Agiyaris, Derasars and others) play a larger evolutionary role in progress of the society, rather than continuing to de-generate further and stay a stumbling block in the path to socio-economic progress.
The State must realize and accept that politicians and bureaucrats are mostly handicapped insofar as their capability to run businesses is concerned. They should therefore focus on securing borders, developing social & physical infrastructure, maintaining law & order and promoting social harmony.
