Best of BS Opinion: US trade deal or not, India must cast its net wider

Business Standard

07-07-2025

Hello and welcome to BS Views, your doorway to today's opinion page. The deadline for US-imposed higher tariffs is almost upon us, and yet there is little to suggest that it has reached a trade deal with India, notes our first editorial. Reports suggest that the US is seeking greater market access in agricultural commodities and genetically-modified (GM) foods, which India is uncomfortable with. One thing is clear, though: the US will have much higher tariffs, increasing friction in global trade. While India and the US might yet reach a deal, the former must seek deeper engagement with other partners. This is necessary also because of China's arm-twisting: it recently recalled some of its engineers working in India as a means to disrupt India's growing strength in mobile manufacturing. Doing all of this won't be easy, but ways must be found to advance engagement with multiple trading partners. Vehicle pollution needs structured solutions, argues our second editorial, as shown by the recent ban - and withdrawal soon after - on selling fuel to overage cars in the national capital. It might have been well-intentioned but was inherently impractical solution to the issue Delhi's toxic air pollution. While the science and law was behind the ban, inadequate monitoring equipment has made a mockery of the directive. Then there was the public outcry, which had political implications. A more structured approach towards vehicular pollution, such as accelerating the adoption of electric vehicles and offering more rigorous testing standards, would work better. Sunita Narain writes on behalf of a cohort that grew up in the post-colonial era and witnessed a world order that was intensely inequitable but still seemed capable of reform. She rues the changing world order, where countries can take unilateral action to bomb another, and the world stands by, helpless and silent. Her lament is in the context of the Israeli bombing of Iran, which is a signatory to the Nuclear Non-proliferation Treaty (unlike Israel, which is suspected of having a covert nuclear programme), and was under the supervision of the International Atomic Energy Agency. The attack on Iran is, she argues, about the future of a world order built on rules, or even the future of multilateralism. All this adds up to crisis of the commons, and one that can only be solved by consensus and trust. Our columnist Ajay Shah argues that China's recall of some of its engineers to stymie efforts by Foxconn to shift globalised manufacturing to India reflects its weakness, not strength. While this may delay movement of high skill activities from China to India, it increases incentives for global firms to do less in China. Globalised manufacturing is a high wire act, requiring building complex firms and deep knowledge, which is available in many places other than China. What's more, China faces two key issues: first, its foreign policy is one of strategic autonomy but at a much lower scale than, say, the US; the second is a lack of intellectual leadership. India's firms need to redouble their efforts at obtaining frontiers knowledge from abroad, rather than just mobilising factory workers into shifts. That is quite a journey ahead. Megan Greenwell's BAD COMPANY: Private Equity and the Death of the American Dream maps the rise of private equity, one of the most powerful forces in America's, if not the globe's, financial and corporate world. Jennifer Szalai says the book emphasises the human costs of private equity, but offers stories that are textured, not one-note tales of woe, stories of tentative hopefulness followed by a rude awakening. The author, herself the editor of an online magazine that was taken over by a PE firm and then run into the ground, notes that she wrote the book not out of spite but of curiosity towards how powerful private equity had become. The catch is that PE firms charge fees and benefit from tax breaks that delink risk and reward. The book points out how abstractions like 'consolidation' and 'efficiency' have given cover to real betrayals.