THe Blog

July 23, 2018

India gets caught in Trump’s trade war

Vivek Dehejia, Resident Senior Fellow at IDFC Institute, is quoted in an Open magazine article on the burgeoning India-US trade dispute. Excerpts:

 

“We have to stop dealing with slogans and clichés and start dealing with realpolitik,” Vivek Dehejia, a professor of economics at Carleton University in Canada tells Open in response to what needs to be done. Professor Dehejia says India’s ‘Look East’ policy sounds good, but the country depends a great deal on the US. “You have to secure your relationship with the US. Dealing with a mercurial Trump is not easy, but you have to find a modus vivendi with the US,” he adds.

 

It is also imperative that India avoids needless trade disputes with the US. One recent example is that of medical implants and devices where India imposed price caps on products that were imported, most of which were made by US manufacturers. The result was that many companies producing these goods withdrew from the Indian market. “All that was done was to annoy the US without any benefits to Indian patients. This has the makings of a major trade dispute now,” says Professor Dehejia. Economic theory suggests price interventions in goods markets should be subject to domestic policy choices and not trade policy."

 

Read the whole article here.

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