What to Read in Indian Express Editorial( Topic and Syllabus wise)

Editorial 1: Unpacking the tariff game plan

Introduction: US President Donald Trump’s 90-day pause on reciprocal tariffs is not a retreat but a strategic move to pressure key trade partners into fairer bilateral deals. Aimed at reducing the $1.2 trillion US trade deficit, the pause targets countries like China, the EU, Mexico, and Vietnam, while challenging the relevance of multilateral systems like the WTO. It also brings challenges and huge opportunity for India.

 Strategic Pause on Tariffs

• Trump announced a 90-day pause on reciprocal tariffs for countries that did not retaliate against his April 2 order.
• Media and economic circles view it as a “climbdown,” but it may be a strategic move to initiate trade negotiations.
• The main goal of USA’s tariff hikes is to reduce the US trade deficit, which stood at $1.2 trillion in 2024.

Purpose of Reciprocal Tariffs

• Tariffs above the base level of 10% were meant to shock US trading partners.
• Trump claims many countries are now eager to strike “fair” trade deals with the US.
• This move challenges the multilateral trading system, pushing for bilateral arrangements.

Focus on China

• China exported $440 billion to the US and imported $144 billion in 2024, creating a $296 billion deficit (24% of total US deficit).
• China has been accused of:
  1. Currency manipulation (undervaluing the yuan),
  2. Non-tariff barriers,
  3. Export subsidies via undervalued currency.
• Even, WTO has failed to address these issues, reducing its relevance.

Other Major Trade Deficit Contributors

Countries	Imports to US	Exports from US	US Trade Deficit (in %)
European Union (EU)	$609B	$372B	$237B (20%)
Mexico	$516B	$334B	$182B (15%)
Vietnam	$136B	$13B	$123B (10%)

 

• Others:
  1. Japan, Canada, and India (India’s deficit: $45B, ranked 10th)

Impact on China and Global Trade

• If the current 125% tariff on Chinese goods continues, exports to the US will sharply decline.
• China, with surplus production capacity, may face a recession unless it finds new markets.
• China is pivoting towards ASEAN and promoting an “Elephant and Dragon” partnership narrative.

 

Implications for India

• India-China trade imbalance:
  1. Imports from China: $109B
  2. Exports to China: $15B
  3. Trade deficit: $94B
  4. Import-to-export ratio: 88:12 (worse than US-China 75:25)
• Risk of being flooded by cheap Chinese imports, potentially harming domestic industries.
• Example: Indonesia’s textile sector has suffered from Chinese import dominance.
• With US market access shrinking, China may target: ASEAN, EU, India, South Asia, and Africa.
• Hence, a vigilance is advised to protect local industries.

 

Opportunity for India in the US Market

• India can replace China in US imports, especially in:
  1. Textiles & apparel (T&A)
  2. Machinery
  3. Toys & games
  4. Footwear & leather
• US apparel market (2023): $81.5B (second-largest after EU)
• China has been the top exporter, but tariffs will reduce its share.
• India aims to achieve $100B in T&A exports by 2030.

 

Steps for India to Seize the Opportunity

1. Incorporate fashion design in apparel to match global trends.
2. Shift to manmade fibre (MMF) apparel, which dominates globally.
   1. Address high import duties on MMF raw materials (polyester, viscose).
3. Rationalise inverted duty structures in the textile value chain.
4. Fast-track the PM-MITRA scheme to scale up modern textile infrastructure.
5. Operationalise two PM-MITRA parks on a war footing:
6. Navsari (Gujarat)
7. Virudhunagar (Tamil Nadu)
8. Focus on exports and incentivise Special Economic Zones (SEZs).

 

Conclusion: Trump’s tariff strategy may reshape global trade by forcing renegotiations and opening opportunities for countries like India to fill the gap left by China. Success will depend on how well domestic industries adapt and seize this changing trade landscape. India has nearly missed the post-Covid ‘China+1’ opportunity, but India should not miss this ‘once in lifetime’ opportunity.

 

Editorial 2 : A global talent hub

Introduction: As high-income countries face a looming labour shortage, India—with its large, young population, stands at a strategic advantage. With only 1.3% of Indians currently working abroad, there is immense untapped potential for India to emerge as a global talent hub and boost economic development through remittances and circular migration.

Global Labour Shortage

• High-income countries face a projected labour gap of:
• 40–50 million by 2030
• 120–160 million by 2040
• Sectors impacted: industrial work, healthcare, teaching, engineering, and research.

 

India’s Untapped Migration Potential

• Migrants generate $125 billion annually in remittances (3% of GDP).
• India’s migrant share is only 1.3%, compared to:
  1. Mexico: 8.6%
  2. Philippines: 5.1%
  3. Bangladesh: 4.3%

 

Positioning India as a Global Talent Hub

• Leverage the “India for the World” initiative alongside “Make in India.”
• Remittances reduce poverty more effectively than goods exports.
• A 10% rise in remittances cuts poverty by 3.5% (study across 71 low-income nations).
• Structured migration can curb illegal migration and boost India’s global reputation.

 

Current Demand in Developed Nations

• Labour shortages in US and Europe:
  1. Truck drivers (up to 73%)
  2. Engineers, cleaners, nurses, construction workers (over 50%)
• Need to diversify migrant flows to Europe, Middle East, and Southeast Asia across skill levels.

 

Seven Steps for Building a Global Indian Workforce

1. Establish Institutional Framework
   1. Strengthen the Ministry of External Affairs’ migration arm.
   2. Identify new markets, negotiate agreements, align skills with demand.
   3. Create state-level departments and embassy-based migration desks (modelled on the Philippines).
2. Align Skills and Accreditation with Global Standards
   1. Integrate foreign languages and global job skills in education.
   2. Promote mutual recognition of qualifications and joint certifications.
3. Ease Financial Burden for Migrants
   1. Establish funding mechanisms to cover high migration costs (Rs 1–10 lakh depending on region).
   2. Consider models like the Philippines’ employer-sponsored expense system.
4. Streamline Government-to-Government Agreements
   1. Remove visa barriers, ease integration, and ensure recognition of Indian qualifications.
   2. Replicate the Philippines’ successful bilateral agreements with over 65 countries.
5. Create a Mobility Industry Body
   1. Regulate and standardize the overseas recruitment sector.
   2. Ensure ethical recruitment practices and alignment with global standards.
6. Develop a Social Welfare Framework for Migrants
   1. Adopt ILO guidelines for minimum wages, contracts, housing, healthcare, and legal support.
   2. Set up mechanisms for grievance redressal.
7. Support Reintegration of Returning Migrants
   1. Facilitate economic and social reintegration.
   2. Leverage returnees’ international skills for local development.

 

Conclusion: Transforming India into a global talent hub is not just an economic imperative but a strategic opportunity to leverage its demographic dividend. By building a strong foundation for talent development and mobility, India can position itself as a leading supplier of skilled and semi-skilled professionals worldwide. This will not only boost remittances but also enhance India’s global influence and reputation.