India’s New Industrial Mantra: Look At The Silver Lining

On the one hand, India will diversify its search for more market access, and on the other, improve quality and technology of its manufacturing to reduce costs and compete better on the world stage. That's what industry and government have decided together.

That the Indian government is taking firm steps to live with the uncertainty surrounding US tariffs, while identifying alternative export and trade geographies, is clear from the Commerce Ministry’s meeting with a delegation from Dubai earlier in the week. The Crown Prince of Dubai, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, and some of his ministers, met an Indian team headed by Piyush Goyal in Mumbai.

The agenda was single-minded — to increase economic ties between the two geographies. Discussions focused on advancing India-UAE cooperation in trade, energy, investment, manufacturing, logistics, tech and healthcare (India-UAE non-oil trade grew 20.5 per cent in 2024). The post-talk target — push non-oil trade to US$ 100 billion by 2030. PS: India-US trade is 2 per cent of GDP at US$ 80 billion.

Long-pending trade deals with the European Union, which account for 17.3 per cent of India's exports, and with India's old colonial master — Great Britain — are being wrapped up. Said Ambassador Bhaswati Mukherjee in an interview to The Secretariat, "With US tariffs being imposed on everyone, they are more amenable to strike a deal quickly."

Earlier this week, Finance Minister Nirmala Sitharaman said India was working on deals with others at this time of “global uncertainty”. Prior to her meeting with UK Chancellor Rachel Reeves, she said with uncertainties “multiplying by the day”, most countries were working on bilateral arrangements.

“In the recent past, we have signed trade agreements with Australia, the UAE and Oman. We look forward to concluding the bilateral trade agreement with the UK, and are already holding talks with the European Union,” Sitharaman said. “That’s the way the world is going.”

Last month, as the world waited for the US tariff strategy to unfold, India also began trade talks with New Zealand and the two sides unveiled plans to sign a Free Trade Agreement in May. “We will expand bilateral trade in the agricultural, aerospace and renewable energy sectors,” New Zealand Prime Minister Christopher Luxon had said after a round of talks in New Delhi. Talks with France are on too.

Look For The Silver Lining 

The message from the government is clear — there is no time for alarm or fear. “Don’t panic; look for the silver lining,” Goyal told representatives from India’s Export Promotion Councils. The over-arching objective is obvious — to ease concerns confronting Indian business houses, particularly in the manufacturing sector, since President Donald Trump made his April 2 ‘Liberation Day’ tariff announcements.

In a separate meeting with start-up firms and the ecosystem, Goyal pulled out a second vignette from what seemed to be a hard hat, for his words came out tough and caused raised eyebrows. “Raise the bar, explore innovations in deeper technology to help the nation progress,” he said. “We need to move beyond food delivery, artisanal brands and online betting apps.”

To some, Piyush Goyal’s comments appeared blunt and critical, while others insisted he was only goading and encouraging the start-up domain to be more creative and resourceful.

Even as a social media debate was born and took on a neo-natal voice, Goyal found a third vignette to silence it: “The government is tracking the evolving global trade environment and working proactively to support industry.” This statement woke up industry, making leaders focus on the real issue at hand.

Since September, The World Has Totally Changed

Six months back, the government had asked exporters and manufacturing firms to promote ‘Brand India’ globally. In September, Piyush Goyal had prodded industry to promote the Production Linked Incentives (PLI) scheme, calling it “transformative, a move marking a decade of the ‘Make in India’ initiative”. Since that address, the economic globe has spun quite theatrically.

It is this changed global equation with tariff wars unleashed, that have led to a sudden change in the global economic landscape, throttling business opportunity. And it is this, perhaps, that has led Goyal and other ministers to urge industry to focus on prioritizing exports and manufacturing. Toeing the government line, Goyal said: “This will be in line with the Prime Minister’s vision of Make in India with Zero Effect; Zero Defect.”

The Commerce Minister added that such moves would send out a strong signal about change in India. Citing his meeting with Australian counterpart Sophie Primas, Goyal said: “The Indo-French discussions focused on fostering stronger ties and enhancing ease of doing business to further expand our trade and investment partnership. We will soon be closing that deal too.”

Overnight Change Is Easier Said Than Done

There were some who felt that a “dramatic detour down progress road” could not happen overnight. Mohandas Pai, former CFO of Infosys and a prominent angel investor, said start-ups can’t just decide to move up the value at will, especially as there is a dearth of capital investment in deep-tech start-ups from both the government and private players. 

“Let’s face it. Investors make a beeline for lifestyle-focused start-ups because these give quick returns. Deep-tech innovations take long and require expensive infrastructure. People are not willing to take long-term risks. We need ‘patient’ money (for deep-tech start-ups to thrive),” Pai said, adding that regulatory curbs on foreign investments in Indian start-ups also hurt innovation and creativity.

Others like Zepto co-founder Aadit Palicha also were at odds with the Minister’s statement that Indian start-ups were “focussed on online betting and products like gluten-free ice creams”. Said Palicha: “Take Amazon, originally a consumer internet company, it has massively scaled cloud computing. AI giants such as Facebook and Google were also consumer internet firms when they started out.”

Debate aside, what’s good is that with the going getting tough, India is making efforts to redo business and identify new geographies, trade partners and investment options. In each business challenge lies a hidden opportunity, to be identified and explored by those with vision. Perhaps, just perhaps, Trump and his team may have unwittingly unleashed such a visionary beast in India with its tariffs.

(The writer is a veteran journalist and communications specialist. Views are personal)