India is at a crossroads due to ongoing tariff wars with the US and changes in global trade dynamics. This is reminiscent of 1991 when India made significant economic reforms due to a deep financial crisis. The economy usually opens up during such distress. However, India has high trade-weighted import duties, averaging 12%, which are among the highest in the world. This makes goods imported from India expensive and limits exports thus increasing a trade deficit. Could this be an opportunity for India to shed its protectionist side and open its economy more? The US and Indian governments are making moves to discuss trade deals, with India lowering tariffs on Bourbon Whiskey, motorcycles, and others to ease some tension. India is positioning itself as a essential player in reshaping global production patterns, with Aseema Sinha commenting that the country now has the chance to lead in crafting a new vision for trade. However, some experts still see India’s willingness to flatten tariffs as a move of weakness, fearing widespread dumping from foreign countries. Others argue that this could be a catalyst for reforms, particularly if the Trump presidency imposes higher tariffs and supply chains are rejigged, thereby providing India with a second chance at global influence.

Source: https://www.bbc.com/news/articles/cd0nr05yxmzo