The steep US tariff will impact India's agriculture, textile, and pharmaceutical sectors, economist Utsa Patnaik said, adding that a boycott of foreign products, similar to the historical 'Swadeshi Movement', could be a way for India to counter the pressure.
Speaking at a workshop on 'Free Trade Agreement and Attacks on Indian Agriculture and Sovereignty', organised by the P Sundarayya Memorial Trust on Wednesday, former JNU professor Patnaik said the tariffs being imposed by US President Donald Trump are a reflection that the American consumers are in crisis.
Patnaik said that during the Great Depression of the 1930s, a blanket 20 % tariff was imposed to protect the US market, and now Trump has done it by unilaterally closing the US market.
"His actions reflect the fact that US consumers are in a state of crisis. Joe (Joseph) Stiglitz has estimated that the real wage of the American worker has actually gone down during the neoliberal era. They themselves feel that they can no longer consume at the same rate as before, as they were doing earlier," Patnaik said.
Stiglitz is an American economist, a public policy analyst, and a professor at Columbia University.
On the production side, she said, there is not much sign of revival of the advanced capitalist economies, and called US actions a "desperate attempt" to get out of the crisis.
She cited the example of countries like Vietnam and Indonesia, which have agreed to eliminate their duties on certain US agricultural products, and warned similar actions may hurt the interests of Indian farmers.
Patnaik also said the US, even though it has a huge area under agriculture, does not have diverse production and can only produce one crop a year, as opposed to India's two crops a year.
"What they can produce is enormous surpluses of wheat and dairy products, for which the domestic market is not enough. The domestic market is saturated...that is why they will never get off the backs of the developing countries. They will always hammer away, saying, Open your markets," she said, adding that India's opening its market to US fruits and nuts has impacted Indian farmers, like apple farmers of Himachal Pradesh.
"As far as the agriculturists are concerned, now with the 50 % tariff already, the adverse impact is going to be very severe," she said.
About the manufacturing sector, she said that while gems and jewellery are big imports for the US, the number of people employed in the sector is lower.
"But the pharmaceutical sector and test labs are going to be hit..." she noted.
"Now, as far as the American market is concerned, it is true that the US is the largest market that India has for its merchandise export. It takes about 15 % of its total merchandise exports..." she added.
"So, one has to sit down and have a very serious look at what concrete measures and demands can be made to the government to at least moderate the impact of the coming crisis," Patnaik said.
Asked about the steps that can be taken, she said, "We are in a situation where imports are being thrust on us against our will. It's a kind of new economic freedom struggle, where boycotting imports is in the interest of our farmers and workers. Let's boycott".
"It has to come from the ordinary people, and also from those who use the raw materials, we are not going to use imported raw materials...Just like the Swadeshi movement," she said.
The Swadeshi Movement was launched in 1905 primarily to protest against the partition of Bengal.
Patnaik also mentioned a debate that took place between Mahatma Gandhi and Rabindranath Tagore with regard to imported goods. The movement promoted self-sufficiency by advocating the boycott of British goods and the use and promotion of Indian products.
"There was an interesting debate between Rabindranath Tagore and Mahatma Gandhi on the use of imported cloth...Gandhi was for boycott, while Tagore said that the poor benefit from the fact that these clothes are cheaper. Gandhi said it doesn't matter, they are taking away food from the mouths of our people," she pointed out.
The additional 25 % tariff imposed by the US on India for its purchases of Russian oil came into effect on Wednesday.
Speaking at a workshop on 'Free Trade Agreement and Attacks on Indian Agriculture and Sovereignty', organised by the P Sundarayya Memorial Trust on Wednesday, former JNU professor Patnaik said the tariffs being imposed by US President Donald Trump are a reflection that the American consumers are in crisis.
Patnaik said that during the Great Depression of the 1930s, a blanket 20 % tariff was imposed to protect the US market, and now Trump has done it by unilaterally closing the US market.
"His actions reflect the fact that US consumers are in a state of crisis. Joe (Joseph) Stiglitz has estimated that the real wage of the American worker has actually gone down during the neoliberal era. They themselves feel that they can no longer consume at the same rate as before, as they were doing earlier," Patnaik said.
Stiglitz is an American economist, a public policy analyst, and a professor at Columbia University.
On the production side, she said, there is not much sign of revival of the advanced capitalist economies, and called US actions a "desperate attempt" to get out of the crisis.
She cited the example of countries like Vietnam and Indonesia, which have agreed to eliminate their duties on certain US agricultural products, and warned similar actions may hurt the interests of Indian farmers.
Patnaik also said the US, even though it has a huge area under agriculture, does not have diverse production and can only produce one crop a year, as opposed to India's two crops a year.
"What they can produce is enormous surpluses of wheat and dairy products, for which the domestic market is not enough. The domestic market is saturated...that is why they will never get off the backs of the developing countries. They will always hammer away, saying, Open your markets," she said, adding that India's opening its market to US fruits and nuts has impacted Indian farmers, like apple farmers of Himachal Pradesh.
"As far as the agriculturists are concerned, now with the 50 % tariff already, the adverse impact is going to be very severe," she said.
About the manufacturing sector, she said that while gems and jewellery are big imports for the US, the number of people employed in the sector is lower.
"But the pharmaceutical sector and test labs are going to be hit..." she noted.
"Now, as far as the American market is concerned, it is true that the US is the largest market that India has for its merchandise export. It takes about 15 % of its total merchandise exports..." she added.
"So, one has to sit down and have a very serious look at what concrete measures and demands can be made to the government to at least moderate the impact of the coming crisis," Patnaik said.
Asked about the steps that can be taken, she said, "We are in a situation where imports are being thrust on us against our will. It's a kind of new economic freedom struggle, where boycotting imports is in the interest of our farmers and workers. Let's boycott".
"It has to come from the ordinary people, and also from those who use the raw materials, we are not going to use imported raw materials...Just like the Swadeshi movement," she said.
The Swadeshi Movement was launched in 1905 primarily to protest against the partition of Bengal.
Patnaik also mentioned a debate that took place between Mahatma Gandhi and Rabindranath Tagore with regard to imported goods. The movement promoted self-sufficiency by advocating the boycott of British goods and the use and promotion of Indian products.
"There was an interesting debate between Rabindranath Tagore and Mahatma Gandhi on the use of imported cloth...Gandhi was for boycott, while Tagore said that the poor benefit from the fact that these clothes are cheaper. Gandhi said it doesn't matter, they are taking away food from the mouths of our people," she pointed out.
The additional 25 % tariff imposed by the US on India for its purchases of Russian oil came into effect on Wednesday.
