As global tariffs intensify, India is rolling out a four-pronged shield, projecting 7.4% GDP expansion this fiscal, says leading economist Mahendra Dev. This multifaceted approach combines diversification, incentives, diplomacy, and infrastructure to fortify the economy.
Export diversification tops the list. Moving beyond the US-China duopoly, India targets BRICS+ nations and Indo-Pacific allies. Pharmaceuticals and gems-jewelry sectors are leading this shift, with exports to Africa surging 25%.
Domestic production incentives form pillar two. ‘PLI 2.0 will propel us toward $1 trillion manufacturing,’ Dev forecasted, referencing solar modules where India captured 20% global share rapidly.
Bilateral pacts constitute the third arm. EU-India FTA negotiations, alongside deals with Canada and Israel, promise tariff reductions worth billions. Dev highlighted how such agreements insulated exports during past trade wars.
Infrastructure modernization seals the strategy. Gati Shakti and Bharatmala projects are compressing logistics costs from 14% to single digits of GDP, enhancing global competitiveness.
Mahendra Dev’s outlook defies pessimistic global forecasts. While advanced economies grapple with recession risks, India’s young demographics, digital public infrastructure, and green energy push provide tailwinds. Monsoon forecasts are favorable, ensuring rural recovery.
Challenges persist: geopolitical tensions and raw material prices. Yet, RBI’s prudent policy and fiscal consolidation build credibility with investors. India’s tariff-taming tactics exemplify adaptive economic statecraft.