Best of BS Opinion: India has a long way to go in catching up to China

Our editorials and columns today look at both India's internal situation in light of global uncertainties, as well as its potential in replacing China in manufacturing

Hello, and welcome to BS Views, our daily wrap of the day's opinion pieces. As usual, the global uncertainty wrought by US President Donald Trump's tariffs continues to dominate the mindspace of policymakers and thinkers. The turbulence brought about will impact every sector of the Indian economy; the only silver lining is that we can expect a better-than-average monsoon - that means one less thing to worry about. Read on!   The India Meteorological Department (IMD) has once again predicted an above-normal monsoon for this year. Our first editorial reminds us that despite advances in irrigation, it is the southwest monsoon that remains critical for Indian agriculture. Last year's surplus rains led to higher production and lower costs, which in turn pushed down retail inflation, opening a window for the Reserve Bank of India in setting the policy rate. However, the government needs to watch for uncertainties in the global economy. Besides climate change, heat stress and monsoon vagaries could cost the Indian economy 2 per cent of its gross domestic product by 2050. Long-term policies must prioritise water conservation and promote sustainable agricultural practices. 

 

Guidance statements of India’s large information technology (IT) firms point to trends that will redefine the sector over the next few years, notes our second editorial. Weak Q4 results point to global uncertainties related to US tariffs. However, the use of generative artificial intelligence (GenAI) is growing, creating opportunities that would require them to reconfigure their business model. Indian IT firms are looking at mergers and tie-ups to penetrate the AI ecosystem. Macro uncertainties apart, this fiscal may see contractions in revenue, or very slow growth across the IT industry as companies adopt new business models. 

 

Our columnist Mihir S Sharma notes that it was not concern for the people - the consumers - that forced US President Donald Trump's hand into pausing tariffs for 90 day but a very important block of people, bond traders, to be precise. There is nothing new in this, he notes, pointing out that consumers are not an organised enough group to make their voices heard, be it in the US, China, or India. In the end, trade policy is usually decided by people who have an actual vested interest in its outcomes, rather than the people who it affects the most: consumers. 

 

Debashis Basu pours cold water over those arguing that tariffs on China are a boon for India. Not so, he says, pointing to the sheer size and scale of China's manufacturing and exports machine. Then there's timing: a long break from China is unfeasible, since higher prices will eventually lead to calls for a resolution. Besides, India’s manufacturing is woefully inadequate; indeed, it is becoming more dependent on imports from China. Basu says that building global competitiveness requires unglamorous work, and questions who in India will do it, or why. It calls for a different level of dedication among our leaders and babus and a sense of national urgency. 

 

Jennifer Szalai finds 'HAYEK’S BASTARDS: Race, Gold, IQ, and the Capitalism of the Far Right' by Quinn Slobodian a bracingly new book. Slobodian, who teaches history at Boston University, traces how right-wing figures have positioned themselves as critics of “neoliberal policies” even as they paying homage to the economist himself.  The book demonstrates how a history of ideas can be riveting, as it grounds intellectual abstractions in the lives of the people who espoused them.