Over 24 hours last week, the owners of two of India’s largest wireless carriers, whose billionaire owners have been opposed until now, until now Elon Musk has obtained a free pass to enter their market, even if announced on X (and then removed), even if a welcome message was posted on X, even with satellite broadband services even on the spacious and spacious service of satellites.
Narendra Modi did not respond to the opposition Congress party’s allegations, orchestrated by his administration “with Trump’s purchase of goodwill.” But last month, news reports from the Prime Minister’s visit to the White House were about how India allowed the import of Tesla’s cars, with a duty far below the current 110% IT charge, and it’s clear that New Delhi is changing its adjustments to trade and Tycoons.
Over the past decade, Modi’s economic strategy has relied heavily on a team of national champions. To protect them from foreign competition, by 2022, the drop to 7% in China was raised to 12% in 2011, the highest tariff in the world.
The preference for high tariffs, favorable government contracts, and non-Talif barriers such as stifling foreign-backed business rules are well known internationally. During Trump 1.0, U.S. Trade Representative Robert Lighthizer kept a biography of about 15 people on his desk while negotiating with New Delhi. As he pointed out in his 2023 book: “I will seek the interests of these people when predicting government positions in India.”
Academic research confirms the growing number of wealthiest businessmen Mukesh Ambani and Gautam Adani, as well as Mumbai-based Tata Group, Cement Czar Kumar Mangalam Birla and Telecom Tycom Tycoon Sunil Mittal. The share of non-financial assets in the top five groups rose from 10% in 1991 to 18% in 2021. Expansion has increased rapidly after Modi first became prime minister in 2014. This is the conglomerate “starting to acquire increasingly larger shares within the departments they attend,” according to the former Central Bank (Viral Acharya), former Central Bank (Viral Acharya), former Central Bank (Viral Acharya), and former Central Bank Deputy Governor, and now New York University at New York University. “Given the high tariffs, the five major groups do not have to compete with their international counterparts,” Acharya pointed out in his 2023 study. They also don’t have to test their muscles overseas. They earn most of their income at home, in telecommunications, media and retail to ports, airports, building materials and autonomous driving. The Modi government has begun preparing for domestic industry on April 2, and the Commerce Minister has asked exporters to “get rid of the protectionist mentality.” They are not people who need to change their minds. The state has strong political requirements for curriculum correction.
The Trump administration highlighted India’s 39% tariff on agricultural products, which is eight times the U.S. charges when pushing India to buy more products from the U.S. But Modi has proven relationship with farmers in northern India. They rejected a more market-based pricing system he proposed and continued to incite greater national protection. In a country where nearly half of the labor force is still in agriculture, any trade concession on agriculture may be politically expensive. It might be safer to push the burden of Trump’s tantrum to local billionaires.
But the tycoons will also lobby for protecting their turf. According to media reports, India has asked manufacturers to replace parts and raw materials made in China with U.S. substitutes. That’s an expensive proposition. If Modi management strongly pushes this line, there will inevitably be resistance. There is already a murmur in the bureaucratic circle, and the most prone countries in the world have maintained strong alignment with the West, allowing themselves to be used as pawns for the US-China competition. Maybe it’s time to fix the nearby connection. If Tesla is to be welcomed by the red carpet, why not clear the long-term application of China Bit to build electric vehicles in India with local partners?
That’s just an example. Any mistake in defining and protecting India’s national interests could overturn the entire model, in which a small group of national champions were galvanized to reproduce the economic success that competed with China, but at a relative distance. This narrative is far from the result. Since 1960, factories have produced smaller GDP than at any time. Meanwhile, the trade deficit with China has doubled in the past decade, reflecting India’s dependence on a larger economy.
Trump put India’s trade surplus with the United States, the largest overseas market in South Asian countries, close to $50 billion in a year, when Modi’s shortage of $100 billion. It can’t come at a worse time. Domestic demand is slowing sharply, and the stock market is declining at a rate of $1.3 trillion. New Delhi’s greatest hope is to provide Washington with broader trade negotiation time by delaying the threat of mutual tariffs, especially politically sensitive agricultural products.
The sudden enthusiasm of the business of the Trump administration’s efficiency head has a clear message to Indian billionaires: they are cut.
