India has prices for 3 reasons. One is pure stupidity

AA step that we are going to ask ourselves: does Maga turn into MIPA? The progress of Donald Trumps Make America still a program again, which again leads Make India Poor?

This is the kind of question that the government does not want us to ask. When the Prime Minister went to Washington, the Indian plasticity media told us what a success was his visit. Piyush Goyal spent several days in America without any good news of substance to report, but you would not necessarily learn that from the media.

For the most part, successive Indian governments have convinced American administrations that this is indeed the case. Total trade between India and the United States has doubled over the past decade, around $ 130 billion In 2024. American companies employed 1.7 million people in India and made substantial investments in our economy.

But regardless of the number of rallies Howdy Modi and Namaste Trump may have been organized by members of the Sangh Parivar and their friends, that does not make a difference for Donald Trump.

The Trumps platform is based on the increase in American trade income and the sale of expensive defense equipment while simultaneously increasing American jobs. He doesn't care about this last rampart against China's stuff. He doesn't even care about global policy. Its policies are resolutely island.

India can live with part of this. We can buy American weapons and oil to keep Trump happy. But that will not be enough. As Trump has often said, and as Howard Lutnick, his trade secretary, repeated while speaking to India's conclave today last week, we have to lower our customs functions (prices) to correspond to the United States. Indeed, this means that if we do not leave American goods (which are cheaper than ours) on our market with very low tasks, Trump will impose punitive tasks on the Indian goods sold in America.

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3 reasons for prices

From nowhere, it seems good for India. Although our prices have decreased since the 1991 reforms, they are well above global standards.

We impose them for three reasons. One: protect the national industry. Two: Increase income. Our current budget presupposes customs income from RS 2.40,000 crosses during the year 2026. And three: pure stupidity.

Stupidity is easy to counter. Why, for example, should we fight with the EU to continue imposing punitive tasks on the right wine when there is no final wine industry to protect?

The implications of income are more worrying. If we reduce the prices on American products, we will also have to provide discounts to other business partners. Once customs revenues drop, the government which has been sufficiently desperate to destroy the Indian stock market with new capital gains tax systems, it is difficult to find sources of income not yet unexploited.

And then there is the protective argument. Most impartial people will agree that there is less and less need to protect the national industry.

However, some people disagree. And the problem is that it is business people and manufacturers who finance and support the Modi government. It is to help these people that India went against the tendency of liberalization in 2020 to impose higher tasks in fields such as solar equipment.

The Aatmanirbhar Bharat slogan may or may not work with voters, but it certainly works with industrialists whose companies are protected by the tariff barriers of governments.

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Open agriculture

Although Indiatric Tasks on Industrial goods can be reduced, agricultural goods offer a more complex set of problems. Lutnick said last week that India was to open its agricultural sector.

But how? In this case, affected people are not industrialists but farmers.

Take the dairy sector where tasks can go up to 60%. Whenever the government has tried to sign an international agreement on dairy imports, it has been forced to withdraw by Amul, which indicates that a drop in prices will bankrupt millions of dairy producers.

It is the same with other areas of the agricultural sector. Open India to cheap American agricultural imports and millions of farmers will go bankrupt. And agriculture is the only area where the Prime Minister has already been forced to retreat.

So how can Narendra Modi agree with what Trump and Lunick want without risking his own political position?

India is now faced with a fundamental and complicated dilemma. Flacks are trying to obscure it by focusing on how Trump released a chair for Modi when the Prime Minister was in Washington or claiming that the Elon Musk campaign against Usaid will help India.

Trump may or may not like Modi on a personal level. But there is one thing we know about the American president: his approach to most problems is strictly transactional. He will never give anything without expecting more in return.

In real terms, the options of Indian governments are limited. He takes the only course opened there: calm down and delay. Offer symbolic reductions in prices (motorcycles and Bourbon whiskey for example); Make noise about Trump (which, according to Americans, has done); buy expensive oil products and weapons; Continue negotiations; And let's hope things change. What they could.

Trump is entirely motivated by the feeling of voters. Currently, protectionism is popular with Trump supporters who think it will create more jobs in America and help American companies in difficulty.

But it may not last. Many imports of foreign products in America are cheaper than American equivalents. It is not clear how voters will react when prices increase following the taxation of prices. And while Trump seems quite willing to alienate the neighbors of the Americas and most of Europe, only one major global crisis could force America to rethink its isolationism.

In economic terms, a rethink may well be late after the response of the US stock markets to Trump policies. In his first TER, the market exploded because of him. But this time, there is a profound concern about the island policies of the asset and its insistence on the high prices. The dollar is doing less well under Trump than under Joe Biden.

Trump, who prides himself on making his supporters richer, may have to modify his policies if the market does not stage a concerted recovery. This could work at Indias Advantage.

With Trump, you expect the unexpected. India is therefore right to hope that things change. Because if they don't, we could have real problems. It could really be like a time that made India poor again.

Vir Sanghvi is a printed and television journalist and a talk show animator. He tweet @virsanghvi. The views are personal.

(Edited by Theres Sudeep)