Dialogue with USA

The 50 per cent import duties by the USA on many Indian products like apparel, leather footwear, gems, shrimps, etc., will lead to higher prices in the USA and a possible contraction of demand for them. Some economists have recommended that India should focus on creating domestic demand for these products or scan alternate markets. Frankly, this may not be possible.

Indians are not going to suddenly start wearing more clothes or shoes or eat more shrimps. Moreover, the decline in export orders will lead to closure of some factories and create unemployment. Then, local purchasing power will erode.

There are not many countries with the purchasing power and affluence of the USA. So it is not going to be easy to find other markets for Indian products. Every country has specific design or taste preferences. It takes years and decades to build a foreign market and loyal buyers. It is not simple.

So, it would be prudent for India to pursue the dialogue vigorously with the USA and seek a reduction in the import tariffs. In global affairs, discretion is always wiser than valour.

Rajendra Aneja
Mumbai, India