Trump’s 50% tariff: Could this be India’s next 1991 liberalisation moment? Anand Mahindra suggests 2 bold moves to turn it into opportunity

Business tycoon Anand Mahindra on Wednesday proposed two key measures for India after US President Donald Trump signed an executive order raising import tariffs on New Delhi to 50% — one of the highest rates globally.

"Let the unintended consequences we create be the most intentional and transformative ones of all. We cannot fault others for putting their nations first. But we should be moved to make our own nation greater than ever," said Mahindra in a post on X.

Check full text of his post here:
The ‘law of unintended consequences’ seems to be operating stealthily in the prevailing tariff war unleashed by the U.S. Two examples: The EU may appear to have accepted the evolving global tariff regime, responding with its own strategic adjustments.

Yet the friction has nudged Europe to rethink its security dependence, leading to higher defence spending in France and Germany. In the process, Germany has moderated its fiscal orthodoxy, which may well catalyse a resurgence in Europe’s major economies.

The world could gain a new engine for growth.

In Canada, long hampered by notorious internal trade barriers between its provinces, steps are now being taken to dismantle them, bringing the country closer to a common market and enhancing economic resilience. Both these ‘unintended consequences’ could become long-term positives for global growth. Shouldn’t India too seize this moment to shape a virtuous consequence for itself?

Just as the 1991 forex reserves crisis triggered liberalisation, can today’s global ‘Manthan’ over tariffs yield some ‘Amrit’ for us?

Two strong steps we can take today are:

1. Radically Improve Ease of Doing Business
—India must go beyond incremental reform and create a genuinely effective single-window clearance system for all investment proposals.
—While states control many investment regulations, we can begin with a coalition of willing states aligning with a national single-window platform.
—If we demonstrate speed, simplicity, and predictability, we can make India an irresistible destination for global capital in a world seeking trusted partners.

2. Unleash the Power of Tourism as a Forex Engine
—Tourism is one of the most underexploited sources of foreign exchange and employment.
—We need to dramatically accelerate visa processing, improve tourist facilitation, and build dedicated tourism corridors around existing hotspots, offering assured security, sanitation, and hygiene.
—These corridors can serve as models of excellence, encouraging other regions to emulate and raise national standards.

And a broader action agenda to build on these pillars: Liquidity & Support for MSMEs; Infrastructure Investment acceleration; A Manufacturing Push, via enhancement and expansion of the scope of PLI schemes; Rationalise import duties so that duty on manufacturing inputs are lowered and assist in improving our competitiveness.


India tariff touches 50%
U.S. President Donald Trump issued an executive order on Wednesday imposing an additional 25% tariff on goods from India, saying the country directly or indirectly imported Russian oil.

The additional tariffs mean India will face the highest levy along with Brazil, putting it at a significant disadvantage against regional competitors such as Vietnam and Bangladesh.

After the new levy, India will face the highest tariff of 50%, along with Brazil. This puts India at a disadvantage in the US market compared to its competitors, which will attract lower duties — Myanmar (40%), Thailand and Cambodia (36% each), Bangladesh (35%), Indonesia (32%), China and Sri Lanka (30% each), Malaysia (25%), and the Philippines and Vietnam (20% each).

The announcement comes at a time when a US team is scheduled to visit India from August 25 for the sixth round of negotiations for the proposed bilateral trade agreement (BTA).