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1. A note for New Delhi on dealing with ‘Trumperica’
The Trump administration’s swift and radical policy shifts—marked by strict immigration measures, aggressive tariff weaponization, and heavy investments in artificial intelligence—pose significant challenges for India. As the U.S. adopts an “America First” approach, India faces potential economic disruptions from altered remittance flows, a shrinking talent pool, and shifting global trade dynamics, necessitating a strategic recalibration of its domestic and diplomatic policies.
U.S. Policy Shifts under Trump 2.0:
- Rapid Policy Changes: President Trump initiated “100s of Executive actions” in his first 100 hours, signaling a radical reorientation of U.S. policy.
- America First Approach: Emphasis on protecting U.S. interests through aggressive measures in immigration, trade, and technology.
Immigration Crackdown and Its Implications:
- Tightening of Border Security: Measures include enhanced border security, designating cartels as terrorist organizations, and stricter visa vetting.
- Impact on Indian Migrants:
- Legal and Illegal Migration: Indians are significant among both legal migrants (second-largest group to gain citizenship) and undocumented migrants (3rd largest group), with around 7.25 lakh Indians estimated among 14 million undocumented migrants.
- Economic Repercussions for India:
- Loss of Remittances: Escalated deportations could reduce remittance flows.
- Reintegration Challenges: Returning migrants may add to domestic unemployment and require support.
- Diplomatic Leverage: U.S. may pressure other countries (as seen with Colombia) to comply with its deportation demands, potentially affecting India’s economic interests.
Trade Policy and Tariff Weaponization:
- Weaponization of Tariffs: The “America First Trade Policy” and punitive tariff threats are designed to coerce other nations.
- Past Precedents: India’s previous quiet acceptance of measures like the withdrawal of GSP status and bans on imports (e.g., oil from Iran and Venezuela) under Trump’s first term.
- Future Challenges:
- Diplomatic Negotiations: India must be prepared to counter U.S. tariff tactics in upcoming high-level meetings (e.g., Modi’s visit to Washington).
- Broader Geopolitical Rivalries: The U.S.-China rivalry, with shifting tariff policies, may complicate India’s trade and investment environment.
Focus on Technology and Artificial Intelligence (AI):
- Massive Investment in AI: The launch of the $500 billion Stargate AI Infrastructure project indicates a priority to establish U.S. leadership in emerging technologies.
- Dual Impact on Migration and Employment:
- Reduction in Reliance on Foreign Talent: By investing heavily in AI, the U.S. aims to diminish its dependency on foreign tech professionals, including Indians.
- Job Displacement: AI-driven automation may replace mid-level technical roles, affecting the prospects of skilled Indian workers.
- Implications for India’s IT-BPM Sector: Given that the IT-BPM industry is a major contributor to India’s GDP and exports, these shifts could disrupt the flow of talent and economic benefits historically linked to the U.S. tech ecosystem.
Broader Global and Economic Considerations:
- Withdrawal from International Agreements: The U.S. has exited or frozen funding for key global institutions and agreements (e.g., WHO, OECD Global Tax Deal, Paris Climate Accord), which may affect global development and climate finance flows that India had counted on.
- Strategic Diplomatic Adjustments: New Delhi must reassess and recalibrate its own policies (on education, skilling, and migration) to mitigate potential adverse economic impacts and maintain strategic autonomy in the face of U.S. unilateral actions.
Policy Recommendations for New Delhi:
- Diplomatic Engagement: India should proactively engage with the U.S. to negotiate economic and migration policies that safeguard its interests.
- Domestic Policy Reforms: There is a need to review and strengthen policies related to education, skill development, and the assimilation of STEM graduates to cope with reduced migration avenues.
- Trade and Investment Strategy: India must be ready to address potential retaliatory trade measures and diversify its economic partnerships in response to a more protectionist U.S. stance.
- Leveraging Global Forums: With the U.S. retreating from multilateral commitments, India might have opportunities to shape global economic and governance architectures.
2. Union Budget 2025: What do farmers want?
The Union Budget 2025 has emerged as a battleground for farmers, who accuse past budgets of favoring corporates over their livelihoods. They demand a radical shift in fiscal priorities, including better MSP, reduced input costs, and comprehensive support measures, to address the deepening agrarian crisis.
Critique of Previous Budgets:
- Earlier budgets under the Modi regime are accused of favoring a few crony corporates and international finance capital.
- These policies have allegedly squeezed the livelihood of farmers, agricultural workers, and other sections of the working class.
Agrarian Crisis and Economic Indicators:
- The decline in allocation for agriculture and allied sectors: from 5.44% in 2019 to 3.15% in 2024.
- Massive cuts in subsidies: food subsidy reduced by ₹7,082 crore and fertilizer subsidy by ₹24,894 crore in the previous budget.
- Disturbing statistics: Over 1,00,474 farmers/agricultural workers committed suicide between 2015 and 2022, and India ranks 105th on the Global Hunger Index.
Pro-Corporate Policies and New Draft Frameworks:
- Introduction of the Draft National Policy Framework on Agricultural Marketing (NPFAM), seen as a backdoor introduction of the repealed Farm Laws.
- Implementation of the four contentious Labour Codes from April 2025, viewed as anti-worker and pro-corporate.
Key Demands of Farmers:
- Minimum Support Price (MSP): Demand for statutory MSP at C2+50% (i.e., one and a half times the comprehensive cost of production), as recommended by the 2006 National Commission on Farmers.
- Reduction in Production Costs: Measures to bring down prices of fertilizers, seeds, insecticides, diesel, water, and electricity by supporting public sector production and increasing input subsidies.
- Loan Waiver: A comprehensive one-time loan waiver for poor and middle farmers to alleviate indebtedness and prevent further distress.
- Crop Insurance: Establishment of a comprehensive crop insurance scheme as an alternative to the flawed Pradhan Mantri Fasal Bima Yojana (PMFBY).
- Irrigation and Power: Increased public investment to complete irrigation projects and ensure affordable, reliable power supply, countering privatization trends.
- MGNREGA Enhancement: Expansion of the scheme by increasing both wages (to ₹600) and the number of workdays (ideally to at least 200) to boost rural income.
- Land Reforms: Enforcement of fair land acquisition practices under the 2013 Act, strict implementation of the Forest Rights Act (FRA), and exploration of cooperative models for agricultural production.
Fiscal Reforms and Taxation:
- Wealth and Inheritance Taxes: Farmers and protestors demand the imposition of wealth and inheritance taxes to generate resources for agrarian welfare.
- Corporate Tax Reversal: A call to reverse the reduction in corporate tax rates and increase direct taxes while reducing indirect taxes to ensure a fairer tax burden.
- Inequality Concerns: Data highlighting extreme wealth inequality in India, where the richest 1% own 40.1% of the nation’s wealth, emphasizing the need for redistributive fiscal policies.
Overall Demand for a Paradigm Shift:
- A radical break from previous budgets is demanded to address the chronic agrarian crisis.
- The need for the Union Budget 2025 to incorporate measures that directly alleviate the economic and social distress of the farming community.
3. Four years on, Myanmar and its continuing nightmare
Four years after the military coup, Myanmar remains mired in a brutal civil war and deep internal divisions. Despite international awareness, ineffective mediation and growing regional rivalries have left the country fragmented and its people enduring relentless hardship.
Prolonged Crisis and Fragmentation:
- Four years after the February 1, 2021 coup, Myanmar remains in a state of civil war.
- The country is fragmented into zones: the central region under military control, peripheral areas controlled by resistance groups, and conflict-ridden zones in between.
Multiple Actors and Ongoing Conflict:
- The resistance is broadly coordinated by the unrecognised National Unity Government (NUG), alongside various ethnic armed organisations (EAOs) and people’s defence forces (PDFs).
- The military junta continues to wage brutal, indiscriminate attacks resulting in high casualties, mass arrests, and widespread displacement.
Humanitarian and Socio-Economic Impact:
- As of January 29, 2025, around 28,405 people have been arrested, over 21,000 remain detained, and at least 6,224 people have been killed.
- More than 3.3 million people are internally displaced, exacerbating an already dire humanitarian situation.
Diplomatic and Mediation Challenges:
- International responses have been muted; the crisis is largely ignored by the global community except by ASEAN and neighboring countries such as China and India.
- ASEAN’s efforts, including the Five-Point Consensus, have failed to bring about a cessation of hostilities or initiate meaningful dialogue.
Role of Regional Neighbours:
- Neighbouring countries (China, India, Thailand, Bangladesh, and Laos) face direct challenges due to border control issues and internal conflicts in Myanmar.
- There is a lack of consensus among these countries on resolving the crisis, compounded by mutual distrust and competing strategic interests.
Elections and Legitimacy Concerns:
- The military junta’s proposal to hold new elections is widely viewed as illegitimate, given the ongoing violence and the fact that it follows an unconstitutional coup.
- United Nations experts assert that elections under the current conditions would not resolve the political crisis but rather reinforce military legitimacy.
Increasing Chinese Influence:
- With diminished Western attention, China has emerged as the dominant external power influencing Myanmar’s internal affairs, further complicating the regional balance.
Implications for the People:
- The prolonged conflict and ineffective external interventions continue to impose a heavy cost on the civilian population.
- The article concludes with a sobering reminder that without genuine dialogue, the people of Myanmar will continue to suffer.
4. Unbroken vigil: On the mid-air accident in the U.S.
A mid-air collision at Ronald Reagan Washington National Airport between an American Airlines jet and a U.S. Army helicopter has highlighted critical safety lapses in one of the world’s most controlled airspaces. The incident underscores the need for unbroken vigilance and improved air traffic management protocols to prevent future tragedies.
- Incident Overview:
- Collision Details: A mid-air collision occurred between American Airlines flight AA5342 (a Bombardier CRJ700 with 64 passengers) and a U.S. Army Sikorsky UH-60 helicopter (with a three-member crew) during final approach at Ronald Reagan Washington National Airport.
- Complex Airspace: The accident took place in one of the world’s most controlled airspaces, where commercial, private, military, and helicopter operations overlap.
- Air Traffic Control (ATC) and Communication Issues:
- Critical ATC Exchange: An exchange between controllers and pilots (“PAT25, do you have the CRJ in sight?… PAT25, pass behind the CRJ”) raises questions about potential miscommunication or procedural lapses.
- Investigation Focus: Aviation safety experts will closely analyze ATC instructions and communications to determine the accident’s root causes, invoking the Swiss cheese model of accident causation.
- Safety Records and Operational Environment:
- Historical Data: FAA safety records for Reagan indicate that, since 1987, there have been about 30 “air misses,” with 10 incidents involving military aircraft.
- Helicopter Operations: A GAO report (2021) highlighted 88,000 helicopter operations within 48 kilometres of Reagan over a three-year period, including 33,000 military and 18,000 law enforcement flights.
- Broader Concerns and Implications:
- ATC Staffing: Concerns over understaffed air traffic control operations have been raised, potentially contributing to safety lapses.
- Relevance to India: With the FAA’s International Aviation Safety Assessment (IASA) Program overseeing Indian aviation as well, the incident serves as a reminder for the need for stringent safety measures at airports with shared civil and military traffic.
- Policy Implications: The accident underscores the imperative for continuous vigilance and improved protocols in managing complex airspace operations.
5. A pragmatic picture: On the Economic Survey 2024-25
The Economic Survey 2024-25 paints a pragmatic picture of India’s current economic slowdown, warning that without significant deregulation and a focus on domestic growth, India may struggle to meet its long-term development goals. It critiques the lingering impact of outdated policies and emphasizes the urgency for reforms to boost competitiveness and sustain growth.
- Backdrop and Economic Context:
- Post-Pandemic Slowdown: After four years of healthy growth, India’s economic momentum is faltering, with stock markets tumbling and the rupee depreciating faster than anticipated.
- Decline in Key Drivers: Domestic demand and public sector capital expenditure (capex) are weakening, while private investments remain sluggish.
- Comparative Growth Rates (2019-20 to 2023-24):
- Government Capex: Increased at a compound annual growth rate (CAGR) of 16%.
- Household Investments: Grew by 12% per annum.
- Corporate Investments: Rose by only 6%, despite significant tax rate cuts.
- Global and Domestic Challenges:
- Retreat of Globalisation: The new U.S. administration is poised to disrupt global trade and taxation frameworks, adding to economic uncertainties.
- Domestic Focus: With globalisation receding, the Survey stresses the need for India to bolster domestic factors to sustain and enhance growth competitiveness.
- Economic Growth Projections:
- GDP Growth Forecast: Real GDP growth is projected to be between 6.3% and 6.8% for 2025-26, slightly below this year’s 6.4% estimate.
- Long-term Ambition: The Survey warns that sustaining growth below 8% over a decade could jeopardize India’s goal of becoming a developed nation by 2047.
- Reforms and Regulatory Environment:
- Need for Deregulation: Recent reforms, though commendable, will fall short unless accompanied by deregulation. The Survey calls for the government to reduce micro-management and regulatory controls.
- Ease of Doing Business: Emphasis on creating a level playing field by empowering small firms, enhancing economic freedom, and minimizing market distortions.
- Accountability and Trust: Urges bridging the trust deficit between the authorities and citizens, including regulators and the regulated.
- Critique of Current Policies:
- Historical Comparison: Criticism is directed at policies reminiscent of 1970s-era import curbs, production-linked incentives, and questionable taxation measures.
- Call for Policy Overhaul: The Survey’s pragmatic advice underscores the need for a significant policy shift to prevent economic stagnation.
Disclaimer:
This analysis is based on the editorial content published in The Hindu and is intended solely for informational and educational purposes. The views, opinions, and interpretations expressed herein are those of the author of original article. Readers are encouraged to refer to the original article for complete context and to exercise their own judgment while interpreting the analysis. The analysis does not constitute professional advice or endorsement of any political, economic, or social perspective.
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