- India must enhance its manufacturing base, competitiveness
- Focus should also be given to strategic tariff rationalisation
The India Steel Supply Chain Summit 2025 (ISSCS 2025), held on April 17-18, provided a platform for infrastructure and construction stakeholders to tackle key challenges such as price volatility, raw material fluctuations, and the need for a robust steel supply chain. Organised by BigMint in partnership with Quesrow, the summit saw speakers discussing actionable strategies that India needs to take to boost its economic resilience and tackle global uncertainties.
The session titled “Global Perspectives” addressed the impact of rising geopolitical tensions, inflation, and trade protectionism. Key insights focused on India’s need to diversify sourcing, bolster domestic manufacturing, and forge strategic trade alliances to sustain growth and competitiveness.
Key takeaways
Navigating a fractured global trade landscape
1. Surge in protectionism: The global trade environment is increasingly marked by protectionist measures, including tariffs reminiscent of pre-Depression policies, creating uncertainty and instability.
2. Cascading tariff effects: Tariffs on intermediate goods disrupt supply chains, raising costs across industries – a dynamic inadequately addressed by conventional tariff analyses.
3. Systemic risks: Significant tariffs imposed by major economies risk destabilising global trade, with wide-reaching consequences for all stakeholders.
4. Historical, structural context: While parallels exist with the 1920s trade environment, disruptions may unfold differently in the service-heavy economies of today, though substantial risks remain.
India’s position, strategic imperatives
1. Elevated tariff structure: India’s average tariffs remain higher than many developed and ASEAN nations, presenting an opportunity for rationalisation.
2. Strategic tariff reductions: Tariff adjustments should align with India’s sectoral interests and long-term goals rather than serve as a reaction to external trade pressures.
3. Prioritising Asian markets: Asia’s growing demand offers India significant export opportunities, emphasising the importance of targeting these dynamic markets.
4. Regional trade engagement: Active participation in regional agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and building stronger ties with ASEAN countries are essential to enhance India’s trade positioning.
5. Domestic competitiveness: Addressing challenges such as labour productivity, product quality, and regulatory flexibility will strengthen India’s manufacturing base and competitiveness.
Global economic dynamics
1. US resilience: The US economy has shown robust performance despite trade disputes, maintaining low unemployment and economic strength.
2. Inflationary pressures: Tariffs often lead to inflation in the imposing country, but India’s unique economic drivers may insulate it from direct inflationary effects.
3. Evolving globalisation: While globalisation may recalibrate under current pressures, deeply interconnected supply chains suggest that a complete retreat is unlikely.
4. Geopolitical context: Trade disputes are intertwined with geopolitical shifts, reflecting changing global power dynamics.
5. “China Plus One” strategy: India’s success in attracting businesses moving out of China depends on addressing core competitiveness issues such as cost structures, quality standards, and labour market practices.
Conclusion
The global trade landscape is undergoing profound changes, with rising protectionism and geopolitical shifts creating both challenges and opportunities for India. To thrive, India must focus on strategic tariff rationalisation, strengthen regional partnerships, and enhance domestic manufacturing competitiveness. By adopting proactive and targeted trade policies, India can navigate these uncertainties and position itself for sustained economic growth in the evolving global order.
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