Trump’s Tariffs Test Modi’s Swadeshi Amid Innovation Shortfall

As US tariffs, a weakening rupee, and global market turmoil pile up challenges, Prime Minister Narendra Modi leans on GST cuts and a revived Swadeshi call.

By MANISH ANAND

NEW DELHI, September 26, 2025 — India today finds itself squeezed by both domestic economic concerns and a turbulent global order. With US President Donald Trump escalating tariff measures, the Modi government faces an unenviable task: how to shield India’s economy while maintaining growth momentum.

Two senior ministers are currently in the US—External Affairs Minister S. Jaishankar representing India at the United Nations General Assembly, and Commerce Minister Piyush Goyal negotiating trade issues. Yet, signs are clear that Washington’s new protectionist tilt is not aligned with India’s interests. Stock markets remain jittery, the rupee has weakened to near-record levels, and the once-dominant dollar itself is losing trust globally as investors flee to gold.

At home, Prime Minister Narendra Modi has attempted to steady the ship by announcing significant cuts in Goods and Services Tax (GST) rates. The idea is simple: cheaper goods mean higher household savings, more spending, and a boost for India’s consumption-driven economy. Alongside, Modi has resurrected the “Swadeshi” call, echoing Mahatma Gandhi’s independence-era slogan. But the question remains—can Swadeshi withstand today’s global economic upheavals?

The problem is structural. India’s much-publicized “Make in India” campaign has yet to deliver tangible industrial depth. Critics argue that it has largely been reduced to assembling imported Chinese parts under an Indian label. Meanwhile, China has played a long game: investing massively in research, development, higher education, and talent attraction programs. With Trump making H-1B visas prohibitively expensive, Beijing is opening its doors to global talent with incentives and infrastructure that rival the US.

India, by contrast, has not matched this seriousness. Research laboratories in tier-2 and tier-3 cities remain underfunded. Professors are underpaid, skilled faculty scarce, and research scholars inadequately supported. Without a strong ecosystem of innovation, India cannot hope to compete with China in patents, science, or advanced manufacturing.

Modi’s emphasis on Swadeshi resonates politically, but slogans alone will not create competitiveness. To truly attract global trust, India must develop cost-effective, high-quality manufacturing, backed by strong R&D and a skilled workforce. That requires an action plan—five, ten, and twenty-year strategies for scaling up research capacity, funding innovation, and retaining talent.

China did not become a global tech leader overnight; it spent decades scaling and investing with discipline. Unless India matches that seriousness, Trump’s tariffs and protectionism will only deepen the challenges.

GST cuts may provide a short-term consumption boost, but without a parallel innovation roadmap, India risks being left behind in the new global economic order.

The message is clear: Modi’s Swadeshi must evolve beyond symbolism into a credible strategy for research, technology, and talent-driven growth—or else India will struggle to navigate the storms ahead.

(This is an opinion piece, and views expressed are those of the author only)

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About The Author

Manish Anand

Manish Anand is a senior journalist with more than two decades of hardcore reporting on beats such as Prime Minister’s Office, Parliament, BJP, Congress, Planning Commission, NITI Aayog, and scores of Union Ministries.

His past has been with The New Indian Express, The Asian Age/Deccan Chronicle, and The Statesman.

For about 15 years, Manish was also a regular commentator and host for talks on AIR on foreign affairs.

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