Amidst the downturn in ties with the US, it is time India explores alternative economic strategies to shield itself from American economic warfare.
The context here refers to the daily tirades the Trump administration’s officials are indulging in against India. What is India’s fault? To import massive quantities of Russian crude oil at discounted prices to not only secure New Delhi’s energy interests but to also stabilize the global energy markets.
It is precisely due to the above reason that Trumpian America has been waging an economic warfare against India. In early August, USA imposed 50% tariffs on India-25% for New Delhi’s failure to negotiate a trade deal that is favourable to the United States and an additional 25% for “financing the Russian war machine in Ukraine”.
New Delhi, has, however, stuck to its guns. India has not only slammed the tariffs, calling it “unreasonable” and “unjustified”, but the Prime Minister of India has also gone on record to say that he will do whatever it takes to protect its farmers, micro enterprises and other sensitive sectors, even if it comes at a great personal cost.
Hypocrisy of USA
The fact that the west has been hypocritical since times immemorial is a known fact. But even among the western countries, USA seems to be the undisputed leader of hypocrisy. The US claims to target India in order to aid Ukraine and end Europe’s biggest war since World War II. But the nature of American hypocrisy can be found in many dimensions.
Firstly, the crisis in Europe is America’s own making. Since the end of the Cold War, the USA led NATO has been on an expansionist drive eastwards, the Soviet Union’s successor state Russia had warned the west time and again that they must respect Moscow’s core security concerns which lies in no militaristic expansion near its borders, USA, however, ignored it. Hence, Russia did what it must do to remind the west in general and the US in particular that it cannot ride roughshod over others.
Secondly, the Americans in recent days claim that more sanctions on Russia would contribute to the ‘collapse’ of the Russian economy. But the Americans conveniently forget that they themselves import a large quantity of commodities and raw materials from Russia, including sensitive materials like Uranium.
Thirdly, the Americans are clearly aware about India’s sensitivities-agriculture and micro, small and medium enterprises (MSME), millions of Indians are dependent on them for jobs and livelihoods. If India opens up its sectors to the US, it will have catastrophic ramifications for the ordinary Indian, yet America continues to persist in its morally questionable demand.
So, it appears very clear that the moral high grounds the Americans in general and the west in particular are taking are hollow to the core.
Alternate Economic Strategy
Given the fact that USA is an important trade partner of India and is an important export destination for Indian goods and commodities, it is absolutely essential that New Delhi take alternate steps to reduce reliance on such an unreliable country. One such step is to go swadeshi.
Swadeshi is a Hindi word which means promoting indigenousness. As an idea, swadeshi is quite old. It dates back to the anti-partition movement in the Bengal province of British India in 1905. In response to the British decision to partition Bengal, the largest province of British India and the nerve centre of Indian nationalism, the nationalists in Bengal and the rest of India started the swadeshi program that lasted from 1906-1908.
This involved promoting indigenous production in various sectors. Bengal Chemical is a shining example of it.
The crucible of swadeshi animated the Indian independence movement in the coming decades. Under the leadership of Gandhiji, the masses spun the charkha to produce khadi, which was a material used for making the Indian dress-dhoti and kurta for men and the saree for women. It wasn’t just about the attire; the larger aim behind going swadeshi was to enhance the spirit of defiance and fan the fire of nationalism among the Indian masses wherein by prioritizing indigenous production of important goods and commodities, India would be able to take on the mighty British Empire.
The idea of swadeshi also evolved after independence, it then manifested itself in Nehruvianism. In the Nehruvian model of development, heavy industries and public sector undertakings were regarded as the “temples of modern India”; however, its development was to be done entirely by Indian capital-both state and private under state supervision. This, form of planning, laid the economic foundations of modern India.
Fast forward to 1991, India which experienced a severe economic crisis decided to go for LPG or Liberalization, Privatization and Globalization reforms under which India rolled out the red carpet for foreign capital, reduced the role of the state in economic realm and removed provisions of mandatory reservation and licensing of industries. But in doing so, it exposed India to the vagaries of global economic shocks. The global financial crisis of 2008 was a good example.
Now under the current Indian dispensation, swadeshi has acquired a new meaning-it does not mean import substitution, it does not mean rejecting foreign capital; it does not mean shying away from bold economic reforms. What it means is this-no matter where the capital comes from, the labour has to be Indian. It must ensure a better quality of life for India, Indians and should bring profit to the concerned foreign partner who is collaborating with India. Prime Minister Modi’s vision of swadeshi is to reduce India’s vulnerability emanating from supply chain shocks and secure India’s economic and energy interests. Transfer of technology and joint production are key aspects of this vision of swadeshi. The Brahmos missile program is one of the best examples of this idea of swadeshi.
India Semiconductor Mission, the National Critical Minerals Mission, the National Green Hydrogen Mission are important government initiatives to make India self-reliant in critical areas like semiconductors, critical minerals and renewable energy.
Apart from this, India must explore alternate geographies and expand the basket of its exports, particularly the services and agricultural sectors.
Therefore, it is the need of the hour that India continues to stand up to American imperialism, prioritize the strategy of swadeshi and stand by her time tested partners who stood by her in her times of adversity.
Pranay Kumar Shome, a research analyst who is a PhD candidate at Mahatma Gandhi Central University, Bihar, India
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