Shoumitro Chatterjee, an Assistant Professor of International Economics at Johns Hopkins-SAIS, shares insights on India's trade landscape amidst U.S. tariff changes. He explores India's unexpected successes in exports and the persistent issues in low-skilled manufacturing. The discussion delves into the implications of rising tariffs post-2017 and how India can strategically navigate global uncertainties. Shoumitro also highlights the importance of open markets for agriculture in bolstering India's trade potential.
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India's Surprising Trade Openness
India is surprisingly open to trade, with a trade-to-GDP ratio similar to China.
On April 2nd, the U.S. government announced a host of sweeping tariff hikes with every single one of America's trading partners. The aim of the so-called “Liberation Day” tariffs was ostensibly to “rebalance” the global trading system, as some Trump advisors have put it.
However, the drastic measure roiled markets and eventually resulted in the President imposing a 90-day pause on most tariffs, with the exception of strategic sectors and imports from China. India, for its part, was slapped with a 26% tariff even as top officials were negotiating a bilateral trade agreement with their American counterparts.
While the fate of future tariffs and any side agreements are unknown, the episode raises serious questions about India’s global economic strategy. To talk about where India goes from here, Milan is joined on the show this week by Shoumitro Chatterjee. Shoumitro is an Assistant Professor of International Economics at Johns Hopkins-SAIS. His research lies at the intersection of development economics, trade, and macroeconomics, but he has also done seminal work on the role of agriculture in development.
Milan and Shoumitro discuss India’s surprising export-led success, its underperformance in low-skilled manufacturing, and the country’s inward turn post-2017. Plus, the two discuss how India can take advantage of the current global uncertainty and where the politically sensitive agricultural sector fits in.
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