The Trump disruption is an opportunity to build consensus on the need for wide-ranging reforms and their execution, the editorial director of Business Standard, and author, writes
The uncertainty and unpredictability of what Trump might do anytime to America’s tariffs make it almost impossible to frame a reasonable view of the manner in which they will impact the economy.
Illustration: Chaitanya Dinesh Surpur
It is not easy to assess the nature of the external shock that US President Donald Trump’s tariff policies have already triggered for the Indian economy. No less easy will be any attempt at evaluating the policy response needed to manage that shock and underlining the lessons it will have for India’s policymakers.
This may be contrary to the general perception. India, after all, is no novice at dealing with external shocks, especially since it opened up its economy in 1991. As many as five disruptive developments roiled the Indian economy over the last three decades and India did manage to weather all those shocks. Therefore, it could be argued that the experience of dealing with past external shocks should help the country now in both assessing the impact of Trump’s policies and prescribing the necessary policy steps. Yet, that does not seem to be the case on the ground.
So, what could be so complex and difficult about Trump’s tariff shock?
There are two caveats on how and why the thesis on India’s ability to learn from the experience of handling those past shocks could become untenable. One, the uncertainty and unpredictability of what Trump might do anytime to America’s tariffs make it almost impossible to frame a reasonable view of the manner in which they will impact the economy.
(This story appears in the 30 May, 2025 issue of Forbes India. To visit our Archives, click here.)