India brightest spot in world, NITI Aayog CEO says update on India-US trade deal likely by end of month

Noting that New Delhi continues to attract a steady stream of foreign investors, Subrahmanyam added: “You have American companies opening global capability centres in India. You don’t see anybody leaving. That basically means the fundamental attraction of India will trump everything else.”

His statement comes at a time when the US is putting immense pressure on India to stop buying crude oil from Russia. On October 22, the US imposed sanctions on Russia’s two largest crude oil producers, Rosneft and Lukoil, barring all American entities and individuals from conducting business with them. It also imposed a 25 per cent tariff on India as a penalty for purchasing oil from Russia, over and above the existing 25 per cent reciprocal tariffs on Indian goods entering American markets. Overall, Indian exports are facing steep additional import duties of about 50 per cent in the US.

Trump’s trade tariff troubles

Referring to trade-related concerns that emerged after former US President Donald Trump imposed tariffs on several trade partners, Subrahmanyam said that many global certainties that existed after the Second World War no longer hold true. “So the world is in flux where trade is flat, FDI is flat or declining,” he said.

“Given that, I think India will be a pole that attracts everyone else. Rather than being forced to make choices, others will be compelled to reach out to India. That is the sweet spot India is in. It’s not necessary for India to take sides between the US and BRICS,” he added.

“We are doing very good because there are strong inherent strengths. And I think if you have to live in the slightly more turbulent times, be it war, be it economy, be it tariffs, build up your internal strengths,” Subrahmanyam said. He also added, “the more India builds up its internal strength, the more the world will actually look at New Delhi far more favourably.”

National Manufacturing Mission

Referring to recent reform measures announced by the government, Subrahmanyam said the biggest among them was the National Manufacturing Mission that was introduced in this year’s Budget.

“The National Manufacturing Mission is going to transform India’s manufacturing landscape. It is going to be a very different approach, quite different, not throwing money alone, but actually focusing on building capabilities,” he said.

The government aims to increase the share of manufacturing in India’s GDP to 25 per cent, up from the current 15–17 per cent.

Responding to a question on India’s re-engagement with China, Subrahmanyam said that large economies are indispensable to global trade. “If that country (China) accounts for 20 per cent of the world economy, you cannot shut off 20 per cent of the world economy. That’s the reality, whether we like it or not. Maybe it’s not our choice,” he said.

He added that China continues to be India’s largest source of imports because of the manufacturing capabilities it has built up.

Explaining Prime Minister Narendra Modi’s emphasis on ‘Swadeshi’, Subrahmanyam clarified that it does not mean protectionism. “What he is talking about is securing yourself from surprises and being self-reliant when necessary,” he said.

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