This article is authored by Pallav Pradyumn Narang, Partner at CNK RK & Co, Chartered Accountants. With extensive experience in international taxation, strategic advisory, and global policy analysis, Pallav brings a unique perspective to the intersection of economics, geopolitics, and technology. At CNK RK & Co, he advises clients navigating complex cross-border challenges and contributes thought leadership on emerging global trends.
Tariffs are one of the most debated tools in economic policy, shaping global trade and geopolitical alignment. Also, thanks to the Trump Administrations latest moves, they are the talk of the town. I do not portend to be an expert in the impact that tarriffs will have on trade and the law of unintended consequences always looms large ( A very relevant example here from Sidin Sunny Vadukut).
Every action in the world of tariffs sets off a chain reaction that very few can fully anticipate, let alone predict with certainty.
Understanding the Current Situation
What is not refutable is the fact that there is a balance of payments issue as far as the US is concerned. Further, China’s hold on Manufacturing is enough to cause unease across the world. At the same time there seems to be a nexus appearing with China at the center and Russia and North Korea in close orbit, followed by many other countries where China has significant influence and/or control. What we have unfolding right before our eyes is not just trade tensions but a full-fledged economic war, that too with the specter of a military conflict casting a long shadow. The United States is taking aggressive steps to ensure its victory and survival should this conflict materialize.
At the core of its strategy is a push for economic self-sufficiency. The aim is to onshore production to an extent that ensures China no longer has the leverage to upend American supply chains at will.
With rapid advances in technology, this aim for self-sufficiency is not just about traditional industries; it is also about preparing for the AI-driven future, where control over critical superintelligent technology could dictate global dominance. The AI wars are just beginning, and Washington is laying its groundwork to ensure it doesn’t fall behind.
Where Does India Fit In?
India stands at a crossroads, with both threats and opportunities presenting themselves in equal measure. The problem? Our bureaucracy remains largely asleep at the wheel, failing to recognize the urgency of the moment.
On the flip side, this moment offers India a once-in-a-generation opportunity. Can we position ourselves as the preferred alternative to China for global supply chains? Can we convince American firms that India is the best place to move their production? This is not just about economics; it is about national security, economic resilience, and long-term strategic positioning.
However, India faces significant hurdles. Chinese influence operations (psyops) are a reality, and if we do not counter them effectively, they will shape global narratives to our detriment. Additionally, while doing business in India can be rewarding, it remains far from easy. The ease of doing business must truly improve on the ground and not just in random global rankings if we are to capitalize on this opportunity.