At the BT India@100 conference, Montek Singh Ahluwalia stated that Trump's tariff policy has affected global trade, but India should not follow the US. He emphasized free trade agreements, saying that the country needs to adopt a new strategy for 9% economic growth, not just 6.5%.
New Delhi: From the platform of the BT India@100 Summit, former Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, made serious remarks regarding the impact of the US tariff policy on global trade. He said that the tariff war initiated by Donald Trump has disrupted trade balances worldwide. However, he also clarified that India should not follow the US path at this time, but rather pursue its own independent strategy. According to Ahluwalia, protectionist policies are not the right path for India's long-term development.
Global Imbalance Created by Trump's Tariff Policy
Regarding Donald Trump's tariff policy, Montek Singh Ahluwalia said that it has caused serious imbalances and uncertainty in global trade. He described it as a direct attack on the rules-based global trade order. According to Ahluwalia, even if the US does not see immediate harm from these decisions, these steps could be devastating for the global economy.
India Should Not Imitate the US
Ahluwalia stated clearly that India does not need to imitate the US. He said, “Just because the US is creating pressure by imposing tariffs, it does not mean that we should also adopt the same policy.” He advised India to determine its own strategy regarding global trade and make decisions keeping long-term interests in mind.
Three Important Options for India
Ahluwalia said that India has three important options:
- Follow the path of the US
- Adopt its own independent trade route
- Or increase its activity in global alliances
He suggested that India should work on a Free Trade Agreement (FTA) with the European Union, strengthen the ongoing agreement with the UK, and seriously consider joining trade groups like the CPTPP. This would increase both India's share and credibility in global trade.
Advised Caution Regarding Trade with China
While discussing trade relations with China, Ahluwalia acknowledged that strategic concerns may limit some imports, but he advised against adopting a Trump-like mindset. He said that imposing restrictions based on bilateral trade deficits goes against the basic understanding of economics and could harm India.
Need 9% Growth Rate, Not 6.5%
Speaking about India's economic situation, Ahluwalia said that the country is not in an economic crisis like in 1991, but the current 6.5% growth rate is not enough. He said that if India wants sufficient employment and overall development for its young population, it will have to achieve an economic growth rate of 9%. For this, the government needs to bring about a change in its strategic approach.
