|
Two By Two Fri, 11 Apr 25 |
An abridged, narrative version of the latest episode of Two by Two, The Ken’s premium weekly business podcast. |
Are Trump's tariffs a crisis or an opportunity for India?. India doesn’t have the leverage that other trading partners do. But there are opportunities for both industry and consumers
| 3 min read |
Good Morning [%first_name |Dear Reader%],
You are on a free plan. Your subscription has expired. Upgrade now to unlock premium newsletters, top feature stories, exclusive podcasts, and more.
A lot of noise and damage, and then some relief. For now. That’s how things have panned out since US President Donald Trump announced his worldspanning tariffs on 2 April.
In the wee hours of 9 April, just a little while before we recorded this week’s episode of Two by Two, the US dialled up import tariffs on China to 104%, compelling China to raise its own tariffs on the US to 84% that same evening. By nightfall in India, the US increased that 104% to a baffling 125%, and then just yesterday, to 145%. But Trump also eased off on most other trading partners, pausing new tariffs for 90 days and opening up space for negotiations.
The White House even said: “don’t retaliate, and you will be rewarded.”
To me, that just sounds like: bend your knees.
Is this turn of events weighty? Yes. Surprising? No.
Perhaps I’m being unkind. Maybe the Trump administration has eased up because they’re concerned at the direction the world economy might take, though I wouldn’t care to wager anything on that.
But how is India faring amidst all this?
We were slapped with a tariff of 27% on 2 April, lower than many other nations, so you might be thinking things could have been a lot worse. But maybe that’s burying our heads in the sand. In fact, as this week’s episode of Two by Two shows, the focus on tariffs might be distracting from far bigger problems in India’s export game.
Mohit Satyanand, our guest for this episode, is an investor and entrepreneur who has seen many economic downturns. And as a sharp observer, he quickly turned our gaze to more pressing issues that were getting lost in the noise.
The sheer breadth of Mohit’s conversation with hosts Rohin Dharmakumar and Praveen Gopal Krishnan make it difficult for me to sum it all up in a newsletter. I’ve included a couple of excerpts, but this episode is really one you should listen to in full if you want to make sense of the chaos, and where India stands in the equation.
If you are subscribed to The Ken’s Premium plan, you can use The Ken app to listen to the full episode.
If you are a free or basic subscriber, you can:
1. Subscribe to The Ken’s Premium subscription tier, then install our iOS, iPad, or Android apps to start listening. This will get you access to more than just Two by Two. You will also be able to read our long-form stories, premium newsletters, and visual stories.
2. Subscribe to Two by Two on Apple Podcasts. It’s a monthly subscription, which gives you access to all of the new and previously released premium subscriber episodes.
Get rid of our own insidious tariffs
Mohit: When you mollycoddle manufacturers and industrialists, you penalise the consumer.
What do we do about it? There are two classic answers.
The first is that you’ve got to liberalise at the grassroots, not just in terms of changing laws. The problem is that there’s no incentive to do so.
[…]
There’s no forcing function.
The other is that you actually create much more pressure. Now the way in which you classically create that pressure is by setting your currency afloat. You open up your markets, you say no tariff.
[…]
In specific reaction to the US, as a representative of the Indian consumer, I would say go and say from tomorrow that we have zero import tariffs on anything, and that puts the pressure on Trump, to the extent that he talked about tariffs being reciprocal.
[…]
It’s definitely going to benefit me (as a consumer).
In fact, our high tariffs haven’t resulted in our enterprises becoming more valuable. Neither have they helped in creating export industries that we can use as leverage.
Mohit: What has happened over the last 10 years in India is a gradual, incremental, insidious increase in (import) tariffs. Year upon year, upon year, upon year, upon year.
Rohin: Including those infamous quality control orders…
Mohit: Those are non-tariff barriers. But I’m talking just about tariffs at a fiscal level. We’ve increased tariffs across the board. Which is what allowed Trump to say that India is one of the worst offenders when it comes to tariffs.
Ease of doing business in India
But why are Indian entrepreneurs and businesses struggling to go global?
Mohit: India’s ease of doing business (ranking) went up to 63 from 142. And I have two questions about that.
First, is 63 good enough for the most populated nation in the world?
Second, we all know there was a farce.
The World Bank itself said we’re suspending this because it’s been gamed.
And even if you say that it was accurate, I’m going to ask you this question. How much of India did this ease of doing business index represent geographically?
Praveen: My guess is it’s something really, really small.
Rohin: About 15%?
Mohit: It represented two cities, the cities of Delhi and Bombay. That’s all it represented. A complete fraud at the global level.
For decades, Indian governments have protected and guarded our industries, but we really haven’t struck gold—nothing big enough to really help us on the global stage. Which is why the tremors around tariffs are a distraction from the real problem: our lack of leverage.
To listen to more on how India can turn this tariff adversity into an opportunity, listen to the full episode here. Also, what do you make of this situation? Share your thoughts with us at [email protected].
See you next week!
Regards,
Hari Krishna
Get a premium subscription to The Ken
Unrivaled analysis and powerful stories about businesses from award-winning journalists. Read by 5,00,000+ subscribers globally who want to be prepared for what comes next.
Trusted by 5,00,000+ executives & leaders from the world's most successful organisations & students at top post-graduate campuses
|
|
|
|
Hari works as a producer and researcher on Two by Two and First Principles. He’s from a “little village in Kerala where nothing much happens”, enjoys reading books (although he loves buying them even more), and appreciates films—be it on Netflix or Criterion.
|
|
Share this edition
You can use the easy share buttons below
|
|
|
|
|
© 2025 The Ken
Do you know anyone else who would like to read this newsletter?
Share this edition with them.