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Donald Trump’s recent tariff threats – ranging from a 25% levy on imports from Canada and Mexico to a staggering 100% tariff on BRICS countries if they pursue creating new currency – have sparked global economic unease. For India, these developments pose a vital question: could these protectionist moves by the US inadvertently open doors for India to expand its trade footprint, particularly in sectors where it already enjoys comparative advantages?

The global economic landscape has seen increasing volatility with the resurgence of protectionist policies. Trump’s plan to impose tariffs of 25% on Canadian and Mexican imports would impact an ecosystem accounting for over $1.5 trillion in annual trade with the US. This move follows a familiar pattern. During Trump’s earlier term, tariffs targeting China led to a 24% decline in US imports in categories with a 7.5% tariff and a dramatic 47% drop in those with 25% tariffs. While these policies aim to bolster American manufacturing, they also create market vacuums. As India has demonstrated in recent years, such shifts in global trade dynamics can be opportunities for agile economies.

India’s merchandise exports to the US are already significant, with a 13.6% share in sectors such as gems and jewellery, pharmaceuticals, and textiles. In 2023, gems and jewellery alone accounted for a substantial portion of Indian exports, valued at $8 billion. However, this pales in comparison to Canada and Mexico’s combined 21% share of US imports in similar categories. With Trump’s proposed tariffs potentially reshaping supply chains, India stands poised to expand its presence in these and other high-growth sectors like processed foods, where it already commands a 9% share of US imports.

Recent data from Money control reveals that 43% of the categories Canada and Mexico supply to the US are witnessing a decline. This erosion presents India with a chance to fill the gap. For instance, while Canada and Mexico dominate with a 28.7% share of US imports in the top 25 commodity categories, India’s share remains a modest 2.9%. This disparity underscores the potential for growth if India can align its trade policies and production capacities to meet US demand.

Furthermore, Trump’s renewed threats against China, including a 10% tariff on Chinese goods, echo his first term, when a similar policy catalysed India’s export growth in non-traditional sectors like smartphones. Between FY19 and FY24, India added $25 billion in additional exports to the US, of which only 20% came from established categories like medicines and jewellery. This demonstrates India’s ability to pivot and capture emerging opportunities in the global supply chain.

While trade in goods may offer opportunities, Trump’s protectionist stance could challenge Indian IT firms, which generate over one-third of their revenues from the US market. During Trump’s first term, visa restrictions and regulatory hurdles significantly impacted the sector. Firms like Wipro and Infosys responded by ramping up local hiring, with Infosys employing over 25,000 Americans. Despite these adjustments, concerns about new tariffs, heightened scrutiny, and potential cuts to U.S. corporate budgets loom large.

Proposed 20% tariffs on all imports could send ripples through India’s IT sector, jeopardizing revenue streams from crucial clients in retail and healthcare. This uncertainty, compounded by potential changes in US. Federal Reserve policy that could restrict corporate spending, risks dampening demand for Indian IT services. To counter these challenges, Indian firms should diversify their client bases beyond the U.S., invest in local talent and operations abroad, and explore emerging markets with stable regulatory environments.

While tariff policies may pose risks, they can also create growth opportunities for India’s manufacturing, especially in textiles and pharmaceuticals. However, challenges such as inadequate infrastructure and regulatory hurdles must be addressed for India to become a viable alternative to North American and Chinese supply chains. Strategic investments in capacity building and sustainable practices will be essential.

India can also leverage its push for green manufacturing to meet the sustainability criteria that global companies seek amidst shifting supply chains. This strategic pivot could help India emerge as a reliable partner.

Trump’s tariff threats signal a deeper shift away from the rules-based global trade order. The World Trade Organization (WTO), already under strain, faces further challenges as major economies bypass established norms. For India, this erosion of multilateralism is both a risk and an opportunity. While the lack of a robust dispute resolution mechanism adds uncertainty, it also provides India with a chance to assert itself as a leader in advocating fair trade practices.

The recent proposal for a 100% tariff on BRICS countries pursuing a common currency underscores the geopolitical underpinnings of Trump’s economic nationalism. India, as a key BRICS member, must navigate this delicate terrain carefully. Balancing its strategic partnerships with the U.S. while fostering regional cooperation will be crucial.

Trump’s proposed tariffs encapsulate a blend of domestic politics and global power shifts, presenting India with both opportunities and challenges. Sectors like processed foods, textiles, and pharmaceuticals hold potential for growth, but success hinges on strategic policymaking, infrastructure investment, and sustainability. Yet, rising protectionism and regulatory uncertainties threaten India’s IT sector and broader U.S. engagement. As global trade dynamics evolve, India faces a pivotal moment: can it adapt and thrive amidst disruption, or risk being sidelined in a fragmented world? The decisions made now will define India’s trade role and its economic trajectory in an increasingly interconnected future.

Authors are associated with National Council of Applied Economic Research, New Delhi. Views are personal.

Trams, with their speed averaging 20 to 30 kilometers per hour, match the pace of most public transport in the city, including buses.

When the West Bengal government decided to drastically scale back Kolkata’s 150-year-old tram service, leaving just a short heritage stretch from Maidan to Esplanade, i t igni ted a wave of protests from environmentalists and tram enthusiasts alike. The official reasoning low speed and road congestion – fails to hold up under academic scrutiny. Trams, with their speed averaging 20 to 30 kilometers per hour, match the pace of most public transport in the city, including buses. On busy roads, where traffic flow is already slow, why single out trams as the root cause for congestion?

A closer look reveals that the real bottlenecks are caused by smaller vehicles such as auto-rickshaws and private cars, which clog lanes designated for trams, slowing their operations. About autos, the less said the better. They are a law unto themselves, following minimal traffic rules and the traffic police has little power to discipline them. No doubt, the autos, charging higher fares for shorter distances and accommodating only three to five passengers at a time, are less efficient and more expensive than trams, which can carry 200-300 passengers per trip at far lower costs. Rational commuters, if given a choice, would likely opt for trams – more spacious, economical, and practical for urban mobility. Worldwide, trams are witnessing a big comeback given the multiple advantages of the same vis-à-vis other modes of public transport.

Beyond addressing these misconceptions, the debate over trams opens a broader conversation about sustainability in urban transportation. Trams, with an impressive lifespan of up to 80 years, consume less energy (0.017 kWh per place kilometer.) compared with traditional diesel and natural gas buses (about 0.080 kWh per place kilometer). Incidentally, battery- operated buses (BEBs) consume energy to the tune of 0.67 kWh/km, about 40 times more than a tram.

Thinking of the net-zero carbon emission target, BEBs have been adopted in many states of India and in Kolkata as well, requiring frequent and costly battery replacements, where trams offer unmatched durability, are equally environment friendly and have lower lifecycle costs. With transportation contributing significantly to urban air pollution and greenhouse gas emissions, reviving and expanding the tram network could be a game-changer for Kolkata. Yet, instead of harnessing their potential, the city’s transport policy appears to prioritize costlier and less efficient alternatives, raising a critical question: are we making short-term trade offs at the expense of long-term sustainability?

Typically, a tram or bus unit runs approximately 1,500 kilometers in a month. Let us assume that Single Carriage Trams operate with average passenger occupancy of 100 per trip, considering that in a day the number of passengers will vary, and 20 trams run daily across the city. Each tram and bus operates from 6 AM to 10 PM, totaling 16 operational hours or 960 minutes. By contrast, BEBs require charge on-route with 6–8 minutes of charging at 450 kW for every hour of operation. So, on a approximate basis, let’s consider 800 operational minutes (approximately 12-13 hours). On average, each vehicle completes three round trips daily between points A and B, requiring two hours per round trip, resulting in six single trips per unit.

To maintain service intervals of every 15 minutes in zones like north Kolkata, where four trams operate per hour, buses (BEBs) would need to almost double the number of vehicles to match tram capacity, along with additional fleet to cope up with the battery charging time and given their smaller passenger capacity of 40-50. Thus, if 20 trams are operational, 40 buses with 10 more buses would be required considering the charging time. Both trams and BEBs charge fares between Rs10 and Rs20, so we are assuming Rs20 for both making ticket revenue comparable.

In terms of lifespan, a tram lasts eight times more than BEBs. On the other hand, BEBs incur battery replacement costs of Rs2.5 lakh every five years. Leaving aside the inflation part which will be applicable for both trams and BEBs, let us examine the hard facts from life cycle analysis of trams/BEBs. In the analysis, we have considered both the fixed cost and operating cost of carrying the same level of passengers in either modes to understand the long-run implication and also sustainability keeping environment as top priority.

Now, imagine this: over 80 years, trams operate seamlessly with costs that are around 70 per cent lower than BEBs. Why? Trams are built to last, with minimal maintenance and no need for any major replacements during their lifespan. In contrast, BEBs require sixteen replacements of batteries over the same period. Doesn’t that sound like a significant financial burden?

Now, think about revenue. At aRs20 fare, BEBs generate nearly a loss of 214.11 per cent which is almost double the percentage relative to the tram’s profit margin over 80 years. Also, no matter over 80 years, even in its single life span it runs at a loss of Rs. 51crore, which is a reason to rethink our decisions.

More surprisingly when there is a need for an additional fleet to fill the time for charging, it will be running in huge loss. Trams outperform BEBs more efficiently, proving their efficiency in lower-revenue scenarios. In addition to these, the total cost which includes the fixed and operating costs is almost 3.2 times lower for trams than BEBs accounting for 70 per cent savings if we invest in trams over BEBs.

So, what’s the best way forward for Kolkata? Modernizing the city’s historic tram network could be the game changer. Trams are not only cost-efficient but also environmentally friendly, offering a sustainable solution for high-density zones. So, it’s time to rethink what to adopt now, because that will decide whether a metro like Kolkata will have an affordable, efficient urban transport system or Kolkatans will be at the mercy of autos.

The writers are, respectively, a Research Associate and Professor at National Council of Applied Economic Research (NCAER), New Delhi. Views are personal.

There is a profound mismatch between Germany’s current economy and its institutional inheritance from the postwar period. If the current crisis prompts a wholesale rethink of that inheritance, the logjam blocking necessary reforms could finally be broken.

Germany is the poster child for everything that is wrong with the European economy. GDP is on track to fall for a second straight year. Energy-intensive industries like chemicals and metalwork are in the tank. National champions such as Volkswagen and ThyssenKrupp have announced unprecedented job cuts and factory closures.

I have long argued that the best way to understand these problems is as a negative consequence of Germany’s own prior economic success and of the institutional underpinnings of those earlier achievements. The German economy’s current malaise is further evidence of this.

In the aftermath of World War II – a period of upheaval and crisis but also of renovation and opportunity – what was then West Germany developed a set of economic and political institutions ideally suited to the conditions of the time. To capitalize on its existing prowess in quality manufacturing, policymakers put in place successful vocational training and apprenticeship programs that expanded the supply of skilled mechanics and technicians. To exploit rapidly growing world trade and penetrate global export markets, German industry doubled down on the production of motor vehicles and capital goods, fields where it had developed a pronounced comparative advantage.

At the same time, West Germany built a bank-based financial system to channel funds to dominant firms in these sectors. To ensure harmony in its large companies and limit workplace disruptions, it developed a system of management codetermination that gave workers’ representatives input into C-suite decisions.

Finally, to limit disruptive politics, and specifically to check the kind of political extremism and parliamentary fragmentation that had haunted Germany in the past, a proportional electoral system was put in place so that all mainstream parties had a voice, subject to a 5% minimum threshold for parliamentary representation (to limit the influence of fringe parties).

The happy result of this alignment of institutions and opportunities was the Wirtschaftswunder, the growth miracle of the third quarter of the twentieth century, when West Germany outperformed its major advanced-economy rivals (with the sole exception of Japan).

Unfortunately, these same institutions and arrangements proved exceedingly difficult to modify when circumstances changed. Focusing on quality manufacturing became problematic with the rise of new competitors, including China, yet German firms remained heavily invested in the strategy.

Attempts to alter workplace organization, much less close down uneconomical plants, were stymied by codetermination. Funding startups in new sectors was not the natural inclination of fusty banks accustomed to dealing with long-established customers engaged in familiar lines of business. And a proportional electoral system with a 5% threshold yielded unsatisfactory results and unstable coalitions when voters moved to the extremes, positioning the Alternative for Germany on the right and the Sahra Wagenknecht Alliance on the left to earn parliamentary representation, while leaving the more moderate Free Democrats at risk of being shut out.

The solutions, it would seem, are obvious: Invest more in higher education and less in old-fashioned apprenticeships and vocational training so that Germany can become a leader in automation and artificial intelligence. Develop a venture capital industry to take risks that banks are unwilling to shoulder. Use macroeconomic policies to stimulate spending instead of relying on tariff-ridden export markets. Rethink codetermination and a mixed-member proportional electoral system that has outlived its usefulness.

Not least, release the “debt brake,” another inheritance from the past, which limits public spending. Doing so will permit the government to invest more in research and development and in infrastructure, two critical determinants of economic success in the twenty-first century.

Imagining such changes may be easy, but implementing them is not. Change is always hard, of course. But it is especially hard when one seeks to modify a set of institutions and arrangements whose successful operation, in each case, depends on the operation of the others. Attempting to do so is akin to replacing a Volkswagen’s transmission while the engine is running.

To take one example, German banks, which rely on their existing customer relationships, are most comfortable when lending to long-established firms doing business in long-established ways. In turn, those firms perform best when they have long-standing relationships with banks on which they can rely for finance.

Replace those established firms with startups, and the banks, lacking the expertise of venture funds, will be at sea. If they lend nonetheless, they are at risk of going under. Replace banks with venture capital funds, which have little interest in stodgy metal-bending firms, and those firms will lose access to the external finance on which they depend. Such is the nature of Germany’s institutional gridlock.

The bad news, then, is that there is a serious mismatch between Germany’s current economic situation and its institutional inheritance, and that there are major obstacles to altering the latter to realign it with the former. The good news is that a crisis that prompts a wholesale rethink of that institutional inheritance could conceivably break the logjam. Maybe this is just the crisis that Germany needs.

Barry Eichengreen, Professor of Economics and Political Science at the University of California, Berkeley, is a former senior policy adviser at the International Monetary Fund. He is the author of many books, including In Defense of Public Debt (Oxford University Press, 2021).

There is a need to reimagine agriculture with the twin crises of food and energy insecurity set to challenge global priorities.

“Addressing food insecurity and energy poverty is central to achieving global stability, but tackling these issues independently is no longer sufficient,” warns the World Bank in its latest report on climate and development. The intertwined crises of food and energy security are defining the trajectory of the 21st century, casting a long shadow over global stability. Both systems are under siege — food production is strained by climate change, population growth, and inequality, while energy systems face geopolitical tensions, outdated infrastructure, and the slow transition from fossil fuels. Yet, their interconnectedness presents an even greater challenge: agriculture, a lifeline for humanity, is both a significant energy consumer and a contributor to climate change. As the world teeters on the edge of multiple tipping points, can we truly address one without confronting the other?

Dependency on carbon-intensive energy

Agriculture consumes nearly 70% of global freshwater resources and is responsible for over 20% of greenhouse gas emissions. Its dependence on fossil fuels — for mechanisation, irrigation, fertilizer production, and transportation — has created a vicious cycle of environmental degradation. This reliance also exposes food systems to energy price shocks, threatening global stability. Rising temperatures and erratic weather patterns further disrupt agricultural output, putting the livelihoods of 2.5 billion people at risk. Between 2020 and 2023, nearly 11.8% of the global population faced severe food insecurity, a figure projected to rise to 956 million by 2028.

Renewable energy investments reached $500 billion in 2022, but fossil fuel consumption remains robust due to short-term economic and geopolitical pressures. Nations such as the United States, Brazil, and Guyana continue to expand oil and gas production, prioritising exports and domestic energy security. This ongoing dependency on carbon-intensive energy exacerbates the vulnerability of global food systems, particularly in regions with limited access to reliable energy. Energy poverty reveals sharp global inequities. Low-income countries account for a small fraction of global energy demand but suffer disproportionately from supply disruptions. Extreme weather events frequently damage energy infrastructure in regions where power grids are already unreliable. In rural areas, energy deficits hinder agricultural productivity, leading to higher food prices and deepening poverty. In sub-Saharan Africa, per-hectare fertilizer usage remains far below the global average, contributing to food insecurity despite $1.9 billion spent on fertilizer imports by the top 10 African importing countries in 2021 — more than double the amount in 2016.

Agriculture’s reliance on fossil fuels further highlights its vulnerability. Natural gas, critical for fertilizer production, is both a feedstock and an energy source, with 80% of it used for ammonia synthesis and 20% powering the process. Volatility in natural gas prices directly impacts fertilizer costs and global food prices. Geopolitical actions, such as China’s 2021 ban on phosphate fertilizer exports, disrupt agricultural supply chains. India, which imports 60% of its diammonium phosphate (DAP) fertilizers, experienced significant delays during critical cropping seasons, exposing its vulnerability to external shocks.

Renewable energy offers a glimmer of hope, but its deployment remains uneven. High-income countries installed 83% of new renewable capacity in 2022, leaving low-income nations reliant on outdated, carbon-intensive systems. While solar-powered irrigation and biomass energy solutions could transform agriculture, high costs and inadequate infrastructure limit their reach. The transition risks bypassing those who need it most.

Demands on agriculture

Meanwhile, agriculture is being increasingly burdened with competing demands. Beyond feeding a growing population, it is expected to support the global energy transition by producing biofuels. This dual role often pits food security against energy needs, as biofuel production requires vast land and water resources. In a world where nearly 12% of the population faces hunger, is prioritising energy over food morally defensible? The financial costs of addressing food and energy insecurity are substantial yet achievable. The World Food Security Outlook estimates that ensuring basic caloric needs for the world’s most vulnerable populations will require $90 billion annually until 2030. Tackling malnutrition among women and children demands an additional $11 billion per year, while transforming global food systems could cost $300 billion–$400 billion annually —just 0.5% of global GDP. However, for low-income nations, these costs are staggering, with food insecurity expenses in some cases surpassing 95% of GDP.

The implications of inaction are dire. Food insecurity is projected to cost the global economy trillions in lost productivity and adverse health outcomes. Climate-induced energy disruptions threaten to destabilise entire regions, driving social unrest and mass migration. For example, Africa’s mineral wealth, essential for renewable technologies, is often extracted without benefiting local economies, perpetuating cycles of poverty and underdevelopment.

Need for inclusivity

Despite record investments in renewables, fossil fuel expansions continue unabated. Every delay compounds the human, environmental, and economic costs, narrowing opportunities for a resilient future. Clean energy solutions must address structural barriers to inclusivity, ensuring that the most vulnerable communities are not left behind.

Ultimately, the twin crises of food and energy insecurity challenge global priorities. The solutions are within reach, but they require a fundamental shift in perspective. Agriculture must be reimagined as both a source of sustenance and a cornerstone of sustainable development. Failure to act will create the risk of pushing millions into hunger and undermining global climate goals. As the clock ticks, the question remains: will the world rise to meet the moment?

Anupama Sen is associated with the UK Trade Policy Observatory (UKTPO), University of Sussex. Amit Mitra is with the National Council of Applied Economic Research, New Delhi. The views expressed are personal.

India’s research ecosystem stands on the cusp of a seismic shift with the impending rollout of the One Nation, One Subscription (ONOS) scheme, a Rs 6,000-crore initiative aimed at dismantling the long-standing barriers to accessing global academic resources.

Boasting the promise of providing 13,000 international journals to over 6,300 institutions and nearly 18 million researchers and students, ONOS seeks to upend the narrative of restricted knowledge, which has long hampered Indian academia.

Yet, amidst the applause, one cannot help but ask: can this scheme genuinely revolutionize the Indian research landscape, or will it remain another incomplete policy, leaving many behind? The promise of ONOS is indeed significant. For institutions that currently cannot afford subscriptions, this initiative has the potential to level the playing field. It aligns with India’s growing aspirations to enhance its research output, which saw a 54 per cent rise between 2017 and 2022, more than double the global average of 22 per cent. India now ranks fourth globally in terms of research publication volume, producing over 1.3 million academic papers.

However, this numerical achievement is tempered by the quality and impact of the research. India lags behind in global citation indices, ranking ninth in the world, well below peers like China, the US, and the UK. This disparity raises critical questions about the accessibility and visibility of Indian research – a problem that ONOS can address, but only partially. The scheme’s reliance on centralized access assumes that all institutions have the means to effectively utilize these resources.

Without parallel investments in research capacity and infrastructure, merely providing access to journals may not be enough to bridge the gap between top-tier and under-resourced institutions. Moreover, the ONOS scheme raises another critical issue: the uneven focus on STEM (Science, Technology, Engineering, and Medicine) disciplines. While it will undoubtedly benefit researchers in these fields, the humanities and social sciences remain an afterthought in India’s research ecosystem. These disciplines already suffer from poor output and global visibility. For instance, in 2020, India produced 26,127 gold open-access (OA) articles, predominantly in STEM fields, while research in social sciences and humanities barely made a dent in global databases.

This neglect is exacerbated by the lack of funding for humanities research, further marginalizing disciplines crucial for understanding societal issues. Can ONOS truly address the inequities across disciplines, or will it reinforce the STEM-centric nature of India’s research priorities? The problem extends beyond subscription access to the publication process itself. In the age of openaccess publishing, researchers face significant financial barriers. In 2020, Indian authors paid a staggering $17 million in Article Processing Charges (APCs) to publish their work in openaccess journals.

This represented more than half of the $30 million spent globally, with health sciences alone accounting for $7 million of the total. These costs are predominantly borne by researchers themselves, as most Indian institutions lack dedicated funding mechanisms for APCs. This contrasts sharply with developed countries where national policies often subsidize such expenses, ensuring that research remains accessible to global audiences. Without similar support, Indian researchers struggle to disseminate their work widely, further limiting its impact and citation scores. Even for STEM researchers, APCs pose a significant burden, but the humanities and social sciences are hit hardest. Journals in these disciplines often lack the funding and market size to adopt sustainable open-access models.

As a result, Indian research in these fields remains confined to limited local publications or locked behind expensive paywalls, accessible to only a few. This creates a vicious cycle: without global visibility, Indian social science research struggles to attract citations, funding, or recognition, perpetuating its marginalization. India’s education and research funding landscape amplifies the challenges ONOS seeks to address. Allocating just 3.85 per cent of its GDP to education well below the global average of 4.22 per cent and far behind Cuba’s 12 per cent India underfunds a system where over 50,000 colleges and 1,100 universities struggle with uneven quality, particularly in rural areas.

Research funding fares no better, with Rs 2,985 crore spent on journal subscriptions between 2019 and 2022, largely benefiting elite institutions while leaving smaller colleges and researchers behind. This imbalance stifles innovation and limits equitable access to knowledge. While ONOS is a step forward, it is no panacea. Addressing systemic barriers – like inadequate funding, exorbitant APC costs, and the neglect of humanities and social sciences – is critical. Without national APC funds, open-access mandates, and investments in underrepresented disciplines, India’s vision of global research leadership by 2047 risks becoming a pipe dream. Will ONOS empower all or widen existing gaps? The answer lies in what comes next.

The writers are associated with the National Council of Applied Economic Research, New Delhi. Views are personal.