If this deadlock is to be a turning point, India needs to structurally re-engineer its trade playbook
By Ravishankar Kalyanasundaram
India now finds itself staring at a familiar diplomatic brick wall — a deadlock with the US over trade tariffs. On the surface, it may seem like another passing dispute, but the numbers tell us otherwise. The US accounts for roughly 17–18% of our total exports, worth over $80 billion annually. Even a modest dip here can cost billions, disrupt supply chains, and squeeze exporter margins.
This is the price of leaning too heavily on one market. The real question is whether we’ve built enough alternate demand to absorb such shocks. The honest answer — as an observer, not a prescriber — is probably not. Our trade footprint in Europe, the Gulf, and much of Asia still runs shallow. When Washington sneezes, Delhi’s export engine catches a cold.
The surplus that haunts us
It has taken us decades — and more sweat and blood than many remember — to transform from a nation of food scarcity to one of surplus. Yet here we are, watching a bumper harvest of 25 million tonnes of rice become a logistical headache instead of a dollar opportunity. Who will believe that the world’s largest community of rice consumers hasn’t built a modern, scientific storage system to match its scale?
The same holds true for fruits, vegetables, and floriculture. Smaller nations — some no bigger than one of our states — meet global demand year after year, placing their produce in every corner of the world. Singapore’s orchids are on display across continents, while ours rarely make it beyond the map in trade brochures.
Stop announcing, start delivering
We have been here before — with “Mega Food Parks,” “Make in India” hubs, and SEZs that looked good in press conferences but were planned badly, executed indifferently, and rarely assessed for outcomes. Global exports are not a parade of slogans; they are a race, and you win only when you’re ahead of the competition. Anything else is like training for the Olympics with a grand entourage, only to return with a single bronze.
The same shortfall is visible in our Free Trade Agreements. Look at the one with Australia — plenty of fanfare, but little visible movement in trade flows. Now we wait on the UK deal with fingers crossed. An FTA is meant to augment trade, not just produce a yellow-pages list of importers and exporters. If we were serious, we’d involve a cross-section of professionals — not just External Affairs and Commerce — to match products to markets and turn paper access into actual shipments.
Experts point out that Australian barley could lift the quality of our processed foods and brewing industries; their leather could feed high-value garment and accessory manufacturing in Tamil Nadu and Uttar Pradesh. But where are those consignments? This is where our SEZs and FTWZs should be repurposed — not as frozen monuments to policy, but as live trade accelerators that plug into global supply chains the moment an agreement is signed.
Five moves worth testing — now
Time-bound, performance-linked tax breaks for large export houses — including MNCs in India — that commit to volume and quality in categories like rice, wheat, fruits, and vegetables. Not subsidies, but catalysts for scale and profitability.
Some markets, like car-importing countries with no local manufacturing, have predictable annual demand. Joint ventures with global OEMs like Daimler or Toyota could serve them from India, leveraging our automotive depth.
Reset underperforming SEZs using operational models from Singapore, Taiwan, or the UAE. Aim for true plug-and-play accelerators with efficient customs, bonded logistics, and one-stop market access.
Partner with LME or CME to deepen market liquidity, boost throughput at Indian ports, and lift service income without reinventing the wheel.
With European firms rethinking supply chains, launch a credibility-led pitch — fronted by leaders like Nandan Nilekani or Narayana Murthy — to close deals in months, not years.
No comfort in legal battles
WTO disputes and court petitions sound reassuring but rarely match the speed of the damage. Cases drag for years, settlements tilt to the stronger side, and tariffs bite long before verdicts land.
The urgency is now
No country can avoid disruptions with a major trade partner. But we can decide whether they are body blows or passing jabs. That choice depends on how quickly we diversify markets, align with partners who can lift our competitiveness, and make our export infrastructure global-standard.
In global trade, the aim is simple — take the hit but keep the wheels turning. And this time, we cannot afford to waste another decade proving we have the resilience we already should have built.
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