Connect with us

Opinion

Can India be a winner in the trade war?

Avatar photo

Published

on

The repercussions of the new global trade war initiated by Donald Trump continue. In early April, he announced “reciprocal tariffs” on countries worldwide, ranging from 10% to as high as 49%. In this scenario, almost all countries would face a 10% tariff when selling goods to America. However, some specific countries, including India, experienced a special tariff shock. While Trump imposed a 34% tariff on China, for example, he announced tariffs exceeding 40%, almost reaching 50%, for some other Asian countries like Vietnam, Cambodia, Sri Lanka, and Laos. For India, this tariff was 26%. This means that even New Delhi, which had lowered tariffs on thousands of goods, recommended tariff reductions on half of its $23 billion imports, initiated trade talks, increased imports by $3 billion, and created nearly 500,000 job opportunities with over $40 billion in investment, could not escape the 26% (discounted) Trump tariff.

Tariffs are taxes imposed by a country on goods imported from another country. Donald Trump believes that American goods are unfairly tariffed by trade partners, which harms American companies. This is why he announced these controversial new tariffs to level the playing field. He escalated the trade war by increasing customs duties on China, which retaliated with a 125% tariff, to 145% (and announced today – April 16 – that he has raised it to 245%), while giving the rest of the world a 90-day pause. Yes, Trump’s trade war is now a duel between America and China. And now, Chinese President Xi Jinping is on a Southeast Asia tour to take measures against Trump’s tariffs. When elephants fight, the grass gets trampled. Yes, I know; the elephant is a favorite metaphor for India, but in this duel, the question is: Will India be the grass? Or, alternatively: Will it be a winner as a major swing country in the duel between these two? Let me state at the outset what I will conclude with: Frankly, this duel between America and China has opened up many possibilities for all swing countries, but New Delhi is one of the biggest and most important of them. Frankly, Delhi seems to be in a more advantageous position against Beijing, its biggest rival in trade. To be a winner, it needs to recommit itself to that Covid-era reform idea.

While evaluating crises often seems like a facile approach, it is generally a rational strategy in world politics. However, Delhi has not fully capitalized on such opportunities recently. Especially after Covid, many of the promises remained unfulfilled, and there were no tangible results from the proposed agricultural laws and labor codes. For example, Prime Minister Narendra Modi said in 2021 that the government would unconditionally transfer all business areas except strategic ones to the private sector, but there has been no mention of any privatization other than the Air India sale, which has been ongoing since 2017. There is still no word on the long-awaited reforms in the country. The Indian government had proposed a new economic agenda around two ideas: Atmanirbhar (self-reliance) and Make in India (domestic production model). Under this economic agenda, large amounts were allocated to production-linked incentives, and ease of doing business was promised. The first was partially implemented because production stagnated. However, some production-linked incentives were received, the most prominent being for iPhones. In the midst of the US-China trade war, this could strengthen New Delhi’s hand. Apple may now start shifting its production from China to India. This is at least a good example of a “plus one” against China. Taiwanese-based Foxconn has already moved some of its factories in China to India and started iPhone production. When it comes to ease of doing business, yes, India’s ranking has risen, but at a snail’s pace.

At least, given the Trump tariffs, there may be opportunities for New Delhi in American markets where China cannot compete. We mentioned Apple phones as the first example. However, when you look at the list of products Beijing exports to America, it is not difficult to estimate that there will be tens of billions of dollars worth of export possibilities available. The questions are: How quickly can India ramp up new production to turn this duel to its advantage? If customs duties are significantly reduced, is Indian production robust enough to survive? And what does the Indian government plan to do to ensure this? While subsidies are the first thing that comes to mind, they are expensive, and Trump may find them unfair and object. I am quoting the view of the US Trade Representative’s office on this matter verbatim: “India provides a wide range of subsidies and support to the agricultural sector, including credit subsidies, debt waivers, crop insurance, and input subsidies (such as fertilizer, fuel, electricity, and seeds) at both the central government and state government levels. These subsidies, which are a significant cost to the government, reduce the cost of production for India’s producers and have the potential to distort the market where imported products compete.”

Anyway, America was generally a duty-free economy, which provides Delhi with a $45 billion trade surplus. It is also true that America produces very little that it can export to India. The top two items in the export basket are mineral oils and precious stones. Manufactured goods, machinery and appliances, electrical, and optical equipment have a value of less than $8 billion. In contrast, India exports electrical and pharmaceutical products, which are the top two products on the export list, and the value of these products is more than three times higher, at $26.5 billion. Most of the rest that Delhi buys from America are agricultural products. This is exactly what Trump wants to boost. This directly benefits his farmer base as well. Everything Delhi grows on farms, from walnuts to edible oil, is tariffed at significant rates. Fish, meat, and dairy products are taxed so high that it is almost impossible for America to export them. And this is the only thing America produces in exportable surpluses.

The trade issue seems to be almost entirely limited to manufacturing and agricultural products, which means that services, which account for about 40% of India’s exports to America, are not included. Since none of them cross the border, they are not subject to customs duties. Somewhere in the article, I said that Delhi, which lowered tariffs on thousands of goods, could not escape the Trump tariff. Agriculture is critical for Trump, and Delhi must have realized that it cannot conduct trade by neglecting agriculture and lowering taxes on machinery, boilers, electronic devices, and precious stones, I think. If you look at the India section in the US Trade Representative’s report on restrictive practices of different countries, you can see that agricultural products are marked as non-tariff barriers. Also, the idea that India is an important partner and that the personal friendship between Modi and Trump will bring a special exemption to Delhi is often thought or repeated; however, looking at Trump’s attitude towards his other allies, I don’t think he thinks that way at all. Trump is playing hardball and is very likely to continue playing hardball. Lowering customs duties on non-agricultural goods was the easy part. However, considering Delhi’s traditional insecurities and protectionism, can India open up to milk and meat imports, for example? Furthermore, is milk and dairy production or meat production self-sufficient? Considering Delhi’s production protectionism and historical hesitations regarding agriculture, its task seems difficult. Perhaps the opportunity for agricultural reforms missed during the Covid crisis deserves a second chance for Delhi, and perhaps this superpower trade war, where its best friend and worst rival are showing their hands, is telling it that now is the perfect time.

Rhetoric such as being the fastest-growing major economy or the fifth largest and soon to be third, surpassing Japan and Germany, and the discourse of a manufacturing revolution that has been said to be coming for the last decade but has not yet materialized – or even gone backward – is certainly noteworthy. However, New Delhi, which seems to have moved away from the hard-won economic freedoms of the early 90s, appears to have returned to the belief that growth can be achieved through top-down methods. Higher tariffs have been seen returning in the last decade. You might be buying the world’s most expensive steel from India, for example. In the late 90s, the finance minister of the time said he had brought tariffs down to almost ASEAN levels. Increasingly powerful oligarchs are dividing market share and sectors. Does it work? Is the idea that state patronage will lead India to a manufacturing and export utopia coming to fruition? Take a look at government data: Despite the Make in India domestic production model, where Delhi invested over $26 billion in strategically important sectors to benefit from the exodus from China, the share of manufacturing in the Indian economy has declined compared to the service and agricultural sectors. Or, after the 10-year period of the Make in India initiative, you see that the share of manufacturing in India’s GDP in 2023-24 is exactly the same as in 2013-14: 17.3%. And it tends to be even lower this year. The contribution of manufacturing to job creation was slightly lower in 2022-23 compared to 2013-14; it was 10.6% in 2022-23 while it was 11.6% in 2013-14. Furthermore, while the real success in smartphone production may deserve celebration, the share of exports in its GDP has fallen from 25% in 2013-14 to 22.7% currently. Consequently, the growth rate of Delhi’s share in global exports has also slowed down.

Praveen Khandelwal, a Delhi-based businessman and ruling party member of parliament known for his lobbying activities, may be saying that the high tariff imposed on imports from China to America presents a significant opportunity for India’s trade and industry, and that they want to use this advantage against Beijing in most sectors, including electronics, auto parts, textiles, and chemicals. However, Delhi is dependent on Beijing for parts and equipment, lacks skilled labor, and incentive programs are also insufficient in many sectors where Delhi is competing with Beijing. The Chinese economy, which is five times larger than the Indian economy, is still a formidable competitor. In India’s case, Trump’s tariffs could be softened, or perhaps even completely removed (?); but in return, Delhi may need to offer more than the “tiny concessions” I mentioned in a previous article. It is clear that America expects more than “tiny gains.” While other countries that experienced a special tariff shock are trying to enter into negotiations for reciprocal tariff reductions during the 90-day grace period, New Delhi has already been at the negotiating table with America for some time, but this time Trump is a tough friend. The scale of Indian strategic vulnerability will be revealed by time.

Opinion

India’s space sector: A launchpad for global partnerships

Published

on

Ambassador Gurjit Singh, former Indian Ambassador to Germany, Indonesia, Ethiopia, and the ASEAN and African Union missions

Growing competition in outer space provides India with a unique opportunity to shape a narrative in which collaboration, rather than confrontation, drives space exploration. Recognised as a trustworthy and cost-effective spacefaring nation, India is now well placed to transform its technological advances into enduring international partnerships that contribute to scientific progress, economic growth, and sustainable development.

India’s journey into space has been distinctive. Unlike many space programmes that emerged from Cold War rivalries, India’s programme was conceived as an instrument of national development. Dr. Vikram Sarabhai anchored India’s space vision in practical applications that would improve the lives of ordinary people. Under his leadership, satellites were developed to strengthen communications, weather forecasting, disaster management, healthcare, agriculture and education. This development-oriented philosophy remains central to India’s space programme and resonates strongly with the needs of countries in the Global South, which seek practical applications of space technology rather than prestige alone.

Today, India’s achievements extend  beyond developmental applications. The Chandrayaan missions, the Mars Orbiter Mission, the Aditya-L1 solar observatory, and the forthcoming Gaganyaan human spaceflight programme have established India as a nation capable of executing sophisticated and reliable space missions. Chandrayaan-3’s successful soft landing near the Moon’s south pole placed India among an exclusive group of space powers while demonstrating that world-class innovation can be achieved at comparatively modest cost.

India’s growing credibility comes at a time when the global space economy is expanding rapidly. Valued at over US$600 billion today and projected to approach US$1.8 trillion by 2035, the sector is increasingly driven by commercial activity in satellite communications, Earth observation, navigation, climate services, broadband connectivity, and emerging fields such as in-orbit servicing and lunar exploration. Many countries aspire to participate but lack indigenous capabilities. They seek dependable long-term partners rather than merely launch providers.

India possesses the capabilities to meet these requirements. The liberalisation of the space sector in 2020 transformed the ecosystem by opening it to private participation. The establishment of the Indian National Space Promotion and Authorisation Centre (IN-SPACe), the expanding commercial role of NewSpace India Limited, and the growth of private enterprises have created one of the world’s most dynamic emerging space ecosystems. Indian startups are developing launch vehicles, satellite platforms, geospatial applications and propulsion technologies that are attracting global investment and customers. Companies such as Skyroot Aerospace, Pixxel and Agnikul Cosmos have demonstrated that Indian private enterprise can compete internationally in advanced space technologies.

The next step is to internationalise this ecosystem.

Rather than positioning itself only as a low-cost launch destination, India will offer comprehensive partnerships encompassing satellite design, launch services, mission operations, ground stations, astronaut training, capacity building and downstream applications in agriculture, disaster management and maritime security. Such integrated partnerships would be valuable for countries across the Global South and the Indo-Pacific seeking affordable, customised and reliable technologies to meet their development priorities.

India has demonstrated the diplomatic value of such cooperation. Through the South Asia Satellite, it provided communication and developmental benefits to neighbouring countries. Indian launch vehicles have successfully placed hundreds of foreign satellites into orbit for governments, universities and commercial operators around the world. India’s decision to join the Artemis Accords reflects its willingness to participate in the peaceful exploration of the Moon through international collaboration. Cooperation with  NASA, the European Space Agency and JAXA has strengthened India’s scientific and technological capabilities.

These partnerships reinforce India’s standing as a leading voice of the Global South. India offers development partnerships based on affordability, reliability and mutual respect rather than creating technological dependence. Space cooperation has therefore become an increasingly important instrument of Indian diplomacy, strengthening bilateral relationships while delivering tangible developmental benefits.

To realise its full potential, India will aim to sustain the momentum of reform. Faster regulatory approvals, greater access to venture capital, stronger intellectual property protection, and closer collaboration among research institutions, industry and academia will be essential. Public procurement policies would continue supporting Indian startups, enabling them to scale up, innovate and integrate into global supply chains.

India is positioned to play a larger role in shaping the governance of outer space. Orbital congestion, space debris, responsible resource utilisation and equitable access to emerging space opportunities are becoming pressing international concerns. As space activities expand, there will be an increasing need for countries capable of building consensus on responsible norms and practices. India’s long-standing commitment to the peaceful uses of outer space, combined with its growing technological capabilities, equips it to contribute meaningfully to the development of rules that promote transparency, sustainability and equitable access.

The coming decade will determine not only which countries lead in space but also how space is governed. With its scientific capabilities, entrepreneurial ecosystem and international credibility, India is uniquely placed to bridge the gap between established and emerging space nations. By building collaborative partnerships founded on inclusivity, mutual benefit and innovation, India can transform its space programme into a major pillar of its global engagement.

In an increasingly divided world, India’s space sector offers a powerful reminder that the greatest achievements in space are those that bring nations together. That may well become India’s most enduring contribution to humanity’s next frontier.

Continue Reading

Opinion

Great powers and the fierce rivalry in Africa

Avatar photo

Published

on

In tandem with the retreat of US imperialism and the erosion of its hegemonic capacity, the rivalry among the world’s great powers is intensifying across vast geographies and divergent fronts alike. From Africa to Central Asia, from electric vehicles to artificial intelligence, an acute contest is unfolding—most conspicuously between the United States and China.

History instructs us that wherever great power rivalry takes root, peace remains elusive. Stability cannot endure there. Wars, internal conflicts, coups d’état, and the mass migrations they inevitably trigger dominate the horizon. Nor do great powers desire the cultivation of participatory democracy, human rights, the rule of law, or class consciousness in these lands. Instead, they bolster dictatorships, authoritarian regimes, totalitarian systems, and repressive governance. The imperialist powers harbor no concern for the scarcity of water, drought, or famine in Africa. Their focus is solely fixed on exploitation, plunder, pillaging the resources of the nations upon which they descend, and capturing their domestic markets.

Africa holds singular importance in this context. It commands attention simultaneously by virtue of its sheer expanse, its demographic weight, and its subterranean wealth. In the rivalry across this ancient and impoverished continent, the United States and China lead the vanguard. Russia, too, makes notable maneuvers, though on a less extensive scale. Between the United States and China, the race is particularly fierce regarding the extraction, processing, and conveyance of subterranean resources to world markets.

Africa—endowed with abundant mineral wealth, a population approaching 1.5 billion, and critical strategic importance along global trade routes—whet the appetites of capitalist, advanced, industrialized, imperialist states as a vast, populous, and expanding market. Geopolitically as well, its position cannot be ignored. Africa’s wealth in rare earth elements, precious minerals such as diamonds and gold, and strategic minerals indispensable to advanced technologies—notably copper, cobalt, and lithium—is indisputable.

AFRICA CARRIES NO WEIGHT IN GLOBAL POLITICS

Unlike other continents such as Europe, Asia, or the Americas, Africa possesses no single country that commands prominence in global politics or the world economy. Nor does Africa host an alliance, international organization, or bloc of comparable global stature. In the Americas, there stands a superpower: the United States. In Asia, there are great powers: Russia and China, with India also ascending. In Europe, major, consequential powers endure: the United Kingdom, France, and Germany. Yet on the African continent, no such states exist. What exists in Africa is the rivalry of non-African great powers. Even the 55-member African Union, the institutional body of the continent’s nations, remains far from exerting any real influence—not only in global politics, but even across the African continent itself.

Over the past fifteen to twenty years, Africa has undergone substantial upheavals. Armed conflicts, civil wars, and violence have become pervasive. From Ethiopia to Somalia, Libya to Sudan, armed hostilities have claimed countless lives, destabilized governments, and provoked massive waves of displacement. Terrorist organizations have seized upon these conditions as an opportune opening, and the great powers, in turn, have instrumentalized these terror networks.

In Africa, former nineteenth- and twentieth-century colonial powers such as Britain and France indulge in reveries of bygone eras. They attempt to assert themselves, yet their efforts prove futile. Germany, as Europe’s leading economic, industrial, and technological powerhouse, takes a keen interest in Africa; yet despite this attention, its institutional knowledge and historical experience regarding the continent pale in comparison to those of the British and French. Italy strives to act, but lacks the requisite capacity. The Netherlands and Belgium, once deeply entrenched in Africa, are far removed from their imperial past. Spain and Portugal assert no claim to global primacy. All of these nations languish, to borrow Ahmet Hamdi Tanpınar’s phrase, in “a vague longing for a bygone past.”

China, well aware of Africa’s significance, is investing heavily across the continent. It stands as Africa’s largest trading partner and the primary destination for the continent’s exports. In the provision of loans, credit facilities, and grants to African states, it has outpaced Western institutions. China’s investment and foreign aid capacity, economic leverage, and extensive commercial ties naturally consolidate its political and diplomatic influence across Africa, elevating its visibility and prestige. Under the auspices of the Belt and Road Initiative, Beijing continues to finance large-scale infrastructure investments as well as major communications and transport projects.

THE FEROCITY AND DIMENSIONS OF THE RIVALRY

It is, of course, impossible for Russia to mount massive economic investments, conduct extensive aid operations, or sustain the volume of trade in Africa that China commands. Consequently, it seeks to distinguish itself by guaranteeing the security of local leaders, corporate enterprises, and ruling elites, relying predominantly on private military companies (the operations of the Wagner Group being a case in point). Russia has deployed mercenaries to Mali and the Central African Republic.

The United States, for its part, endeavors to counter China’s expanding influence, economic footprint, visibility, and public diplomacy initiatives in Africa, while simultaneously laboring to reinforce its own economic and political ties with African states. One need only recall that the United States, having intervened in Libya in 2011 through NATO, has directly struck ISIS targets in Somalia. The strategic depth of Washington’s relationship with Cairo is likewise well known.

The United States, China, and Russia also stand out prominently in arms sales to African nations. As the great power rivalry on the continent grows ever sharper, the spectrum of contestation widens accordingly. Cultural rivalry is superimposed upon economic, political, and military dimensions. Because every great power seeking to expand its sphere of influence and reach is determined to block the advance of its competitors, Africa serves both as the stage for and the witness to this unsparing contest. Some experts explain this rivalry through the lens of a new strain of colonialism; others account for it by pointing to the inherent nature, complexity, and multifaceted character of competition between imperialist metropoles.

Continue Reading

Opinion

The women who refuse to be erased: On Japan’s surrender anniversary, the fight over wartime sexual slavery continues

Published

on

BUSAN, South Korea — On the day Japan marks the 81st anniversary of its surrender in World War Two, a conference room in Busan’s city council building has become the latest front in a battle over memory.

Allan Wilson, Journalist

Last month, on 23 July, academics, activists and lawmakers gathered here for a symposium on one of the war’s most painful legacies: the estimated tens of thousands of women — euphemistically labelled “comfort women” — forced into sexual slavery by the Imperial Japanese Army. The event was co-hosted by the Carter Human Rights Center’s Asia division and the Korean Women’s Forum.

“The records of the Japanese military’s comfort women are historical assets that the international community must preserve together,” Nam Myung-sook, the Busan city councillor who co-organised the symposium, told the gathering. “Social consensus must be broadened.”

Her words were aimed at more than the audience in the room.

For three decades, survivors and their advocates have pressed Japan for a full and unequivocal accounting. They have met a familiar pattern: moments of apparent progress — the 1993 Kono statement acknowledging military involvement, the 2015 bilateral agreement with South Korea — followed by retreat. Japanese officials continue to dispute the term “sexual slavery.” Textbooks soften the language. Senior politicians visit Yasukuni Shrine, where convicted war criminals are honoured alongside the dead.

The symposium came as UNESCO’s World Heritage Committee convened in Busan, and the timing was deliberate. One of the gathering’s stated goals was to revive the push to have comfort women records inscribed on UNESCO’s Memory of the World register — an effort Japan has repeatedly blocked.

“Our aim is to reaffirm the historical facts of comfort women (受害) to the international community and explore directions that contribute to peace and human rights,” said Yu Ying-mo, senior adviser to the Carter Human Rights Center’s Asia region, in remarks prepared for the event.

A statue, a warning

The symposium also addressed an incident that has become a diplomatic flashpoint: the recent removal of a comfort women memorial statue in Taiwan.

The statue, one of dozens erected across East Asia and beyond, was taken down in recent months. Organisers in Busan described the removal as “an erroneous approach that erases historical wounds and weakens collective memory,” according to the symposium’s programme.

For advocates, the Taiwan case illustrates what happens when political pressure is allowed to dictate historical memory. “Statues, memorial halls, and archives related to comfort women are important spaces of memory that testify to the victims’ suffering and history,” the Carter Human Rights Center said in its written address. “They must be respected.”

Dozens of comfort women memorials now stand in cities from Seoul to San Francisco to Berlin. Each has become a site of diplomatic friction: Japan’s government has consistently objected to them, arguing they perpetuate what it calls an inaccurate narrative.

The shrinking window

Time is running out. Of the few hundred women who came forward in the 1990s, the number of surviving registered victims in South Korea has dwindled to single digits.

This demographic reality has injected new urgency into the preservation effort. Shim Ok-ju, a research professor at George Mason University Korea, told the symposium that the focus must now shift from oral testimony — soon to be lost — to documentation and education.

Seo Kyung-soon, a professor at Pukyong National University, presented findings from the so-called “Gwanbu Trial” records — a series of postwar legal proceedings in which comfort women sought compensation through Japanese courts. The documents, she argued, contain incontrovertible evidence of state orchestration.

A designated discussant panel followed, bringing together Kim Tae-wan, a political science professor at Dong-eui University; Kim Kyung-hee, an independent researcher; and Ahn Jun-young, a journalist from the Busan Ilbo newspaper. The format was designed to bridge academia and public consciousness — to test whether scholarly findings could survive the scrutiny of working journalists and political scientists.

The international dimension

The comfort women issue has never been purely bilateral. In 1996, the UN Special Rapporteur on violence against women concluded that the system constituted “military sexual slavery.” In 2022, the UN Committee on the Elimination of Discrimination against Women urged Japan to “ensure that the issue is accurately reflected in school curricula.”

Yet the gap between international consensus and Japanese government policy remains wide. Prime ministerial statements offer “apologies and remorse” but stop short of accepting legal responsibility. Reparations have come from private funds, not the state.

For organisers of the Busan symposium, the path forward runs through multilateral institutions. UNESCO recognition, they argue, would make historical revisionism harder to sustain. But Japan has made clear it will oppose any such move, as it did when Chinese documents related to the 1937 Nanjing Massacre were inscribed in 2015.

“Facing history squarely and respecting it is a fundamental value that the international community should share,” the symposium’s organisers concluded.

This 15 August, as Japan observes its National Memorial Service for the War Dead, the women who survived — and those who did not — will be remembered in rooms like the one in Busan. Their numbers are dwindling. The question is whether their story will outlast them.

Continue Reading

MOST READ

Turkey