Tuesday, March 04, 2025

We need to shield ourselves.

"US President Donald Trump in his joint address to the Congress today vowed to kick-in reciprocal tariffs against India and China from April 2, 2025." FE. "India charges us 100% tariffs, the system is not fair to the US, it never was. Whatever they tax us, we will tax them. If they use non-monetary barriers to keep us out of their market, then we will use non-monetary barriers to keep them out of our market," Trump stated. India has instituted strict Quality Control Order (QCO) for imports and exports (Tax Management India) but "The USA, Canada and 17 other members have raised 35 specific trade concerns (STCs) about India's quality control orders over the years. Members criticize India's responses as not entirely responsive to their concerns." Ply Insight. "India's import duties are in compliance with the global trade and the government should convey this to the US administration, economic think tank Global Trade Research Initiative (GTRI) said." ET. That is naive. On his first day in office, Trump issued an Executive Order withdrawing the US from the World Health Organisation (WHO) (The White House), so he is not likely to respect the WTO. In addition, "All Indian commerce ministers from Kamal Nath onwards sought to keep India as closed as possible, and would return from WTO meetings claiming triumphantly that they had protected Indian interests." "In recent years, many analysts have declared that WTO is dying or dead. India cannot escape responsibility for this," wrote Swaminathan SA Aiyar. Indians could be affected by other policies of the Trump administration. Automatic renewal of H1B visas to be cut from 540 days to 180 days. BS. In 2024, Indians "made up 72.3% of the 386,000 H-1B visas issued". Also, "Trump signed an executive order...to combat antisemitism and pledged to deport non-citizen college students and others who took part in pro-Palestinian protests." Reuters. Indian students identified taking part in such protests could be sent back without completing their degrees wasting all the money spent. In addition, "Canada's tightening stance on immigration is also affecting the number of study permits granted to Indian students." "Moreover, the Fall 2025 applicants face the new C$20,635 GIC (guaranteed investment certificate) requirement." NDTV. "Estimates suggest that around 427,000 Indian students are currently enrolled in Canadian institutions." But, "nearly 20,000 Indian students have not joined their respective colleges or universities after arriving in Canada, and the government has no record of their whereabouts." TOI. Indians, who had entered the US illegally, were sent back in handcuffs and shackles. NDTV. The Narendra Modi government "genuinely believes that India's position as the fastest-growing major economy will automatically ensure continued investments and fast growth," and seems completely delusional about "India's export competitiveness - and whether Indian companies even want to export." The Print. The biggest weakness for India may be that Mr Modi would like to remain prime minister forever, while Trump is in his last term and will go in four years and Canada Prime Minister Justin Trudeau has announced his resignation (CNN). They have nothing to lose. India has to shield itself while maintaining diplomatic decorum. Will the arrows pierce through?         

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