| | | Good morning! | | Just 0.3% down, but a different world altogether One of India’s two benchmark stock indices, Sensex, closed at 75,363.84 on Friday, April 4. It closed at 75,135.48 on Friday, April 11. But the four trading days in this period – apart from the weekend, the stock market was closed on April 10 for a public holiday – were anything but ordinary. Next week will have only three trading days – April 14 and April 18 are public holidays again; the month has the highest number of trading holidays, along with October – and given the chaos all around, this is actually a good thing. It’s always been difficult to time the market, but it has become downright impossible to do so now. For instance, will Indian markets boom through the 90-day respite from Trump’s tariffs – India will most likely close a bilateral trade deal in this interregnum – or will they crash on account of the trade war between the world’s two largest economies? The best investing strategy right now may be to sit it out . That’s what our columnist (and one of the wisest voices in the country when it comes to investing) Monika Halan advised – that and a balanced asset allocation (yes, memes on triumphant middle-aged uncles with fixed deposits have started doing the rounds). | | What’s the endgame? That’s the trillion-dollar question (or actually 1.3 trillion dollar question). It has been evident to most people that Trump’s tariffs are unlikely to achieve their desired objective of making the US a manufacturing powerhouse again – at least, not for products such as textiles and leather products and shoes and toys (a grouping that is loosely called soft manufacturing). Soft manufacturing is where China first made its mark, but as the country has moved up the value chain, it is also an area where other countries in Southeast Asia have gained a toehold. The US, as HT’s Roshan Kishore pointed out in a two-part series, still continues to be a powerhouse in hi-tech and even auto manufacturing . To be sure, the nature of hi-tech manufacturing means that many of these US manufacturers depend on imports of components, sub-assemblies, and assemblies from companies in various corners of the world (those who can make the best products at the most competitive prices; that used to be one of the mantras of globalisation). The other problem for the US, is that not all countries have demand for its high-value products. As Kishore said in the second part of the series, referring specifically to integrated circuit imports by Vietnam (they were the top import for the country; and they are the third largest export for the US, which means the country makes them), the country mostly requires low-value ICs, not the “high-value versions” made by the US. Unless the US can start making low-value ICs competitively, there is no way it can capture this market. Tariffs can do little in this regard . | | The Emperor’s new clothes There have been enough people defending Trump’s tariffs, and then his decision to freeze them for 90 days. We’ve been here before: acolytes rushing to defend a leader’s policy, even when it is indefensible. Commentators may have fancy terms to explain this, usually borrowed from marketing – Buyer’s Regret; Dissonance Reduction. But, as is almost invariably the case, there is no need for complex explanations. The reason why everyone agrees with Trump is the same reason why no one else wanted to comment on the emperor’s new clothes ( there were none ). To be sure, there is another manifestation of Dissonance Reduction too – one that tries very hard to explain why an adverse event will actually prove beneficial in the long term. We’ve seen a smattering of pieces by Indian commentators on how the US’ threats on the tariff front will force India to cut its own tariffs – and of how this will force Indian industry to become competitive. India should have done this in the 1990s, goes this argument, but at least it is doing so now. What this argument conveniently ignores is that the pain is likely to be as significant now as it would have been in the 1990s, and that the stakes are so much higher now. As for the theory that there is an opportunity for India in Trump’s tariffs, in the long run, it could hurt India as Ashley Tellis explained in an article published on the Carnegie Endowment website. “Trump’s policies will enhance the conditions for China’s continued rise, increase its legitimacy as a responsible power, and—by burdening India’s development prospects and damaging U.S. alliances along the way—undermine the countervailing forces that could coherently resist Beijing when needed,” he wrote. | | The other T In India, Tariffs weren’t the only T making the news (nor was Trump). There was Tahawwur Rana as well, the co-conspirator involved in the 26/11 terror attacks in Mumbai (in 2008) who was finally extradited to India (from the US) this week. His role in the attack is inextricably linked to that of his friend, David Coleman Headley’s. The latter of course, is in a US prison and will likely stay there – he is believed to have been a double agent – but it is only thanks to his interrogation , in June 2010, by a two-member team from the National Investigation Agency that we know of Dr Tahawwur Rana. It has taken 15 years to extradite Rana . In between, in 2020, he was granted release on “compassionate grounds” but India moved quickly and a US court said he would remain in detention while the extradition hearings continued. | | Our best columnist This weekend, I am looking forward to reading The Undying Light: A personal history of Independent India by Gopalkrishna Gandhi that the good folks at Aleph sent me. Gandhi has a long association with Hindustan Times; his father, Devdas Gandhi was Hindustan Times’ longest-serving editor, he himself worked for some time in a weekly magazine published by HT, and has been a long-time columnist of Hindustan Times. But the real reason why I am looking forward to reading his book is because he is my personal favourite – not just for his way with words, but for the honesty of his writing. That honesty, combined with long years spent in the Indian administrative and diplomatic service is sure to make for some interesting reading. | | | | Were you forwarded this email? Did you stumble upon it online? Sign up here. | | | | | | Get the Hindustan Times app and read premium stories | | | | | | View in Browser | Privacy Policy | Contact us You received this email because you signed up for HT Newsletters or because it is included in your subscription. Copyright © HT Digital Streams. All Rights Reserved | | | | |
