India faces challenges in responding to US mercantilism, particularly with rising tariff demands. Despite accusations, India’s export share remains low, and it contributes minimally to US trade deficits. Reducing tariffs on American products could threaten India’s agricultural sector and food security. A focus on multilateral agreements rather than bilateral concessions may better serve India’s economic destiny and the interests of the Global South.
India must reassess its approach to trade with the United States, particularly in light of what is characterized as US mercantilism. The US, under current leadership, exhibits rogue tendencies in its economic policies, recalling the Washington Consensus era that disproportionately benefited advanced economies and created economic upheaval for many. This disruption has paved the way for populist political figures who now prioritize national interests over global trade obligations.
In recent times, the rhetoric against India has escalated, with the US requesting reductions in high tariffs. However, India’s export numbers illustrate that it is far from exploiting its tariffs for mercantilist gains. In 2023, India’s merchandise exports amounted to $431.5 billion, representing less than 2% of global exports, starkly contrasting with the US and China’s significant shares. This fact undermines any presumptions regarding India’s trade practices.
When examining the US’s trade deficit, India contributes a mere $45.7 billion, which is relatively insignificant compared to deficits with countries like China and the European Union. Despite this evidence, negotiations for trade deals with the US persist, often centered on tariff reductions. However, many US products are prohibitively expensive for the Indian market. Reducing tariffs may consequently yield little benefit, as most American exports do not cater to the needs of the average Indian consumer.
The focus of US trade interests appears to lie in India’s agricultural sector, despite the inherent uncompetitiveness of US farming. The United States provides substantial financial support to its agricultural sector, rendering competition untenable for Indian farmers. Lowering tariffs on subsidized American agricultural products could jeopardize India’s food security and farmers’ livelihoods, raising concerns about taking such drastic measures.
The Indian response must advocate for its position more assertively. Questions remain as to why the narrative of India’s alleged exploitation persists. Historical context reveals that India once championed equitable trade practices in the face of advanced countries’ dominance, advocating during the Doha Round of the WTO. This struggle underlines the necessity for India to reassess its bilateral agreements versus a broader multilateral approach that historically yielded more favorable outcomes for developing economies.
India’s economic expansion has perpetuated inequality, prompting its policymakers to engage with advanced economies at the expense of addressing domestic disparities. While the narrative of India’s imminent rise as a prominent global economy continues to circulate, it masks the ongoing structural inequalities within the country. Trade negotiations should be framed around equitable access and sustainability rather than merely reacting to external demands.
Raising the profile of systemic inequality within the global economic framework is essential. India’s leadership can amplify the voices of the Global South, advocating for a revised economic order that addresses historical injustices in international trade. The call for a more egalitarian economic landscape must prioritize the welfare of marginalized populations over unwarranted concessions to mercantilist pressures from economically advanced nations, including the US.
In conclusion, India’s response to US mercantilism must focus on advocating for a fairer global economic order rather than acquiescing to unilateral demands. The contrasting trade statistics highlight India’s limited role in global markets, and responses should reflect a commitment to protecting domestic interests, particularly in agriculture. By raising concerns about systemic inequality and emphasizing the need for multilateral trade agreements, India can position itself as a leader for the Global South, ultimately seeking a more equitable and sustainable economic future.
Original Source: www.hindustantimes.com
