Indian Economy

[Nibbler]

This is exactly how burgerland functions. And they need to run trade deficits to maintain their grip over the global economy.



If this keeps occurring then a deep recession is likely on the anvil and they will take the global economy down with them. Will affect us too.

It is also the end of global trade as we knew it, poorer nations were supposed to manufacture stuff at lower cost and export to richer nations. This was the only proven way of getting rich for the nations who were not rich in minerals or oil. This was a path the burgerboys themselves promoted.

everything is relative, if india can weather the storm while everyone else gets buckbroken it will be a good thing... if total output goes down -0.5% while the rest of the world goes down by -3% that's a win no?

as long as domestic politics don't get too spicy and everything stays held together.

india is a super protectionist country, i would think the whole world transitioning to a protectionist regime will be a net positive for india.

 

[crazywithmath]

everything is relative, if india can weather the storm while everyone else gets buckbroken it will be a good thing... if total output goes down -0.5% while the rest of the world goes down by -3% that's a win no?

That is definitely not a win. With the demographic dividend by our side, we need to grow real fast. Else, we become old before turning rich - a calamity for a country of our size. We cannot afford a depression.

as long as domestic politics don't get too spicy and everything stays held together.

india is a super protectionist country, i would think the whole world transitioning to a protectionist regime will be a net positive for india.

No, we need market access to export. The rest of the world turning protectionist would screw us royally. Domestic consumption alone cannot help us grow @ 7%+.

The govt went to such extrene lengths to attract shifting supply chains (through PLI, SPECS etc) - tariffs screw it all.

 

[eastern_bhartiya]

everything is relative, if india can weather the storm while everyone else gets buckbroken it will be a good thing... if total output goes down -0.5% while the rest of the world goes down by -3% that's a win no?

as long as domestic politics don't get too spicy and everything stays held together.

india is a super protectionist country, i would think the whole world transitioning to a protectionist regime will be a net positive for india.

uhh, no . If other countries become protectionist then all our attempts at growing electronics and higher value industries will crash.

 

[sameer]

What is the end goal here?

It looks like who blinks first contest.

American inflation hitting over the roof vs World.

Most likely what will happen is Amreeka will get away with some kind of stagflation(~0 - 0.5%) GDP growth/decline with ~5% inflation, basically the same kind of growth that EU has been seeing for the past few years.

Maybe consumption will go down by 5-10% in the worst case. Even then it will still be the world's largest consumption market by a large margin. There's no country close to replacing that level of consumption.

Meanwhile, ASEAN and many other countries who rely too much on exports will get hammered. Very bad times coming for Vietnam, if Trumpwa doesn't relent. Honestly, their entire model is probably now in question.

TLDR; It will hurt America, but it will hurt others even more.

How it will affect India, we have to see. But it might not be pretty. We probably have some comparative advantage vs our peers, but on second thoughts, 26% tariff is still quite a lot.

 

[eastern_bhartiya]

Most likely what will happen is Amreeka will get away with some kind of stagflation(~0 - 0.5%) GDP growth/decline with 5-10% inflation, basically the same kind of growth that EU has been seeing for the past few years.

Maybe consumption will go down by 5-10% in the worst case. Even then it will still be the world's largest consumption market by a large margin. There's no country close to replacing that level of consumption.

Meanwhile, ASEAN and many other countries who rely too much on exports will get hammered. Very bad times coming for Vietnam, if Trumpwa doesn't relent. Honestly, their entire model is probably now in question.

TLDR; It will hurt America, but it will hurt others even more.

How it will affect India, we have to see. But it might not be pretty. We probably have some comparative advantage vs our peers, but on second thoughts, 26% tariff is still quite a lot.

We can do one thing is massively invest in our domestic energy. Probably increase search for crude oil. increase nuclear energy plants. and for god's sake entire babu networks needs to be hanged, we can afford to slow down on manufacturing anymore.

 

[Psacha123]

View: https://x.com/sidhant/status/1907719227991032218?s=46

 

[sameer]

We can do one thing is massively invest in our domestic energy. Probably increase search for crude oil. increase nuclear energy plants. and for god's sake entire babu networks needs to be hanged, we can afford to slow down on manufacturing anymore.

We need to reduce the bureaucracy and the gormint also needs to stop picking and choosing champions(i.e too much support for some family owned conglomerates). India is too over-regulated for our economic size and they need to prioritize deregulation, esp at state level.

 

[Nibbler]

uhh, no . If other countries become protectionist then all our attempts at growing electronics and higher value industries will crash.

if you are getting beaten by the like of vietnam, when world trade was as open as its ever been then perhaps manufactured electronic exports was never going to be a thing.

bitter pill. but one that must be considered.

domestic manufacturing will boom regardless.

india will have to manufacture for domestic market. which is one of the biggest in the world and will only grow larger.

 

[Nibbler]

That is definitely not a win. With the demographic dividend by our side, we need to grow real fast. Else, we become old before turning rich - a calamity for a country of our size. We cannot afford a depression.



No, we need market access to export. The rest of the world turning protectionist would screw us royally. Domestic consumption alone cannot help us grow @ 7%+.

The govt went to such extrene lengths to attract shifting supply chains (through PLI, SPECS etc) - tariffs screw it all.

India is a long way from turning old. There is simply no rush.

Extreme growth rates from east asian economic models also result in extinction tier collapse of birth rates. It looks like the door for that model is closed now anyway, which is a good thing. India can stop aspiring to emulate that garbage.

 

[crazywithmath]

if you are getting beaten by the like of vietnam, when world trade was as open as its ever been then perhaps manufactured electronic exports was never going to be a thing.

Vietnam competed in a different vertical altogether, not sure how many times I have pointed out this exact thing;


View: https://twitter.com/swarajk_/status/1907734346884157769?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet

In the post covid years we have grown faster than them, consistently.

bitter pill. but one that must be considered.

domestic manufacturing will boom regardless.

india will have to manufacture for domestic market. which is one of the biggest in the world and will only grow larger.

We tried it before 1991, did not work. Nobody grows in isolation.

 

[crazywithmath]

India is a long way from turning old. There is simply no rush.

You are aware that even turkey and brazil thought that they had time by their side, right? But they got caught in the 'middle income net' regardless? That future economic growth can never be taken for granted?

Extreme growth rates from east asian economic models also result in extinction tier collapse of birth rates.

It does not matter. India does not follow the East Asian model. It never did.

 

[crazywithmath]

 

[Nibbler]

Vietnam competed in a different vertical altogether, not sure how many times I have pointed out this exact thing;


View: https://twitter.com/swarajk_/status/1907734346884157769?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet

In the post covid world we have grown faster than them, consistently.


We tried it before 1991, did not work. Nobody grows in isolation.

comparing pre 1991 india to today is apples and oranges.. if it gives you comfort IT service exports are unharmed and growing. The people in that sector make up most of the consuming class in india.

You are aware that even turkey and brazil thought that they had time by their side, right? But they got caught in the 'middle income net' regardless? That future economic growth can never be taken for granted?



It does not matter. India does not follow the East Asian model. It never did.

I don't know about turkey or brazil but india's dependancy ratio wont be problematic for a long time. Also TFR anxiety in india isn't tied to that much real data. I'll wait for next census, IMO it will stabilize simply because things like arranged marriage are massively more prevalent than in other countries.

It seems like the east asian model is what a lot of indians aspire to for some reason.

I think India's current model suits the less open world we are transitioning to.

 

[brat4]

Srivastava said that Indian exports of steel, aluminium, and auto-related goods will face a 25% tariff, while pharmaceuticals, semiconductors, copper, and energy products will not be taxed.

Semiconductors have been left out of the US tariffs, recognising their key role in global supply chains, industry body IESA said on Thursday. However, it added that the broader reciprocal tariffs pose a significant challenge to India's exports, as the US remains New Delhi's largest trading partner

This from economic times

Trump’s tariff bombshell hits India, but some desi sectors dodge the shrapnel

Trump Tariffs: US President Donald Trump has imposed significant tariffs on imports from over 60 countries, including a 26% tariff on Indian exports. These measures aim to address trade imbalances but may allow India to strengthen its position in certain sectors like pharmaceuticals...

m.economictimes.com

 

[crazywithmath]

comparing pre 1991 india to today is apples and oranges..

Anybody (even the oil-rich nations) who has attempted to grow in isolation (through domestic consumption etc) has failed spectacularly in the post ww2 era, without any exception.

if it gives you comfort IT service exports are unharmed and growing.

Service exports are directly tied to American econ data - if they eneter a depression those collapse too.

The people in that sector make up most of the consuming class in india.

The people in that secror make up a tiny % of the total workforce. A nation as large as India cannot grow with that alone.

I don't know about turkey or brazil

Then you do not know about the 'middle income trap'. Look it up.

but india's dependancy ratio wont be problematic for a long time. Also TFR anxiety in india isn't tied to that much real data. I'll wait for next census, IMO it will stabilize simply because things like arranged marriage are massively more prevalent than in other countries.

You can afford to wait it out to test your hypothesis. The broader economy cannot.

It seems like the east asian model is what a lot of indians aspire to for some reason.

I do not advocate for it so ignoring this point.

I think India's current model suits the less open world we are transitioning to.

Global economy likely to plunge into a depression if tariffs continue, the manufacturing setups we so diligently built up (through PLI etc) is getting threatened, the biden era cheap credits to build up plants in India likely a thing of the past (look up the plants built by the likes of First Solar etc) - I do not know what gives you folks this much confidence.

 

[Azaad]

Anybody (even the oil-rich nations) who has attempted to grow in isolation (through domestic consumption etc) has failed spectacularly in the post ww2 era, without any exception.



Service exports are directly tied to American econ data - if they eneter a depression those collapse too.



The people in that secror make up a tiny % of the total workforce. A nation as large as India cannot grow with that alone.



Then you do not know about the 'middle income trap'. Look it up.



You can afford to wait it out to test your hypothesis. The broader economy cannot.



I do not advocate for it so ignoring this point.



Global economy likely to plunge into a depression if tariffs continue, the manufacturing setups we so diligently built up (through PLI etc) is getting threatened, the biden era cheap credits to build up plants in India likely a thing of the past (look up the plants built by the likes of First Solar etc) - I do not know what gives you folks this much confidence.

I think you guys are attempting to put the cart before the horse . Your speculations galore about the repercussions of these tariffs on the world economy especially that of the US , China EU & India just a day into the tariffs is speculative at best & alarmist at worst.

Trump's gambling . That's what he did as a businessman & later when he stood for the President. Twice . It's another matter this gamble looks like Russian roulette with 2 chambers loaded.

Already Vietnam blinked & slashed tariffs. How many more countries you reckon will follow suit before the fortnight is out ? How many do you reckon will open up FTA negotiations with the US ?

Once you've a substantial number of premier economies bite the bullet , that there is the assurance for prospective industrialists to set up a mfg base in the US for internal consumption &/or exports. And these need not be your RMG or Nike style footwear.

Those can be offshored or friend shored in countries like India or can continue in Vietnam subject to country of origin rules applied meaning no China . That once again goes much beyond your China + 1 strategy of the Biden administration to a no China strategy.

If all this doesn't work out he can always turn around & blame it on his staff , firing them. However that's the worst case scenario. In the meanwhile if you've a decent number of countries willing to negotiate terms , it's a matter of fast tracking agreements & moving on with trade.

Hell , you could even see Trump consider Chinese style SEZs on both coasts. Why shouldn't that be a possibility ? If the people don't want to sweat it out , you think Trump's the kind who won't mince words calling the general public dumb lazy undeserving of any consideration while calling off the tarrif game ? What does he stand to lose anyway ? He'd be ~ 83 same time 4 years hence when he's hung up his boots assuming he lives that long or much more after that .

 

[Nutcracker]

Until Modi came with MakeinIndia in 2014. For 10 years Chyena was consistently able to massively strengthen it's currency yet keep its export competitiveness intact during Khangress govt. Coincidence ?

 

[Ajayant Tripathi]

He got caught, you will see babus sharing bribes with porty workers in waste bengal and kerala

Others house is more unclean than mine. So i don't need to clean it. Is not the right approach. We should keep our house clean.

 

[Roshan]

View: https://x.com/chandrarsrikant/status/1907800622549643767?t=99wU0WNWN5IQadUpJOy7jA&s=19

He does have a point, only partly imo - see Shark tank business ideas - but doesn't mention govt support that is provided to those core and deep tech start ups in China. I wonder if he has ever held the baniya industrialist class to account similarly?

 

[ezsasa]

View: https://x.com/chandrarsrikant/status/1907800622549643767?t=99wU0WNWN5IQadUpJOy7jA&s=19

He does have a point, only partly imo - see Shark tank business ideas - but doesn't mention govt support that is provided to those core and deep tech start ups in China. I wonder if he has ever held the baniya industrialist class to account similarly?

yes, multiple times. ever since he started getting involved in these trade negotiations, he does not spare anyone.

here's one.

View: https://youtu.be/T3ZxHqq4FCM
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here's the speech..

View: https://youtu.be/ghJJzqiXrZs