If Covid 19 was the “mother of all disruptions”, Trump 2.0 is turning out to be its close cousin – at least in the world of trade and economics. His tariff actions have set the proverbial cat among the pigeons triggering reactions ranging from retaliation and stand-offs to nervous submission. This has given rise to fears of countries retreating from an era of globalisation to pristine protectionism. Many believe the Trump Tantrums, too, will pass. Life will settle down to a new normal once he achieves his first level objectives on the economic and foreign policy front. Reality will bite sooner than later and he will concede that you don’t have to make everything in America to “Make America Great Again”. His predecessor had made similar calls for reviving the United States’ manufacturing industry – but even without the Chinese memes calling out such bravado – he soon realised that it was easier said than done. Of course, the American industry will have to kick in big time to pull up the economy – but it must be in areas where the US has a real “right to win” – whether by virtue of technology or capital – rather than substituting imports of low value-added products. Essentially, therefore, it would boil down to the classical Porterian theory of “competitive advantage of nations”. But much before Donald Trump (re)entered the scene to shake up the world, the reverse shift from globalisation – following the dialectical principles of thesis-antithesis, as it were – had already begun to be felt. The impetus was derived as much from geo-political realities of an emerging multipolar world to domestic economic realities – where globalisation had caused large-scale displacement of labour and widening income inequalities. These pangs were felt not just in a large country like India but across continents as in Europe. Even the Chinese behemoth began to show signs of slowing down. The pandemic was a rude reminder of the perils of dependence on foreign markets. Thus, Narendra Modi’s call for “Make in India” and “Atmanirbhar Bharat” did not come a moment too soon, nor was it the song of a single swallow. Soon, off-shoring may sound passe and ‘reshoring’ could be in. Trump would have only accelerated the process. Old mantras don’t work There are some common undercurrents that have caused these geo-political and economic shifts. In the last two decades, since Thomas Friedman had declared “The World is Flat” – there has been a significant rise of income levels in the emerging world. While that has made these markets even more attractive for the West with its declining financial fortunes – it has also opened up opportunities for domestic entrepreneurs of these countries as well. Technology – the digital explosion in particular – has been a great leveller creating hyper-local markets and boosting micro-enterprise. In an open-source and start-up ecosystem “intellectual capital” is no longer any country’s monopoly. The “one-size-fits-all” formula that was the mantra of globalisation no longer works. “Think Global, Act Local” is being fast replaced by “Think Local, Act Local” for multinational corporations to sustain growth. China, Taiwan, Korea and even Vietnam have demonstrated in recent years what Japan did in the sixties to beat the US and Europe in their own game in manufacturing across sectors – engineering, automobiles, durables, electronics and textiles. And, in all this “nationalism” acts as a great elixir. India has been standing at the cusp of internationalisation. Some may even detect an element of schizophrenia in our mindset – a case of “spirit is willing but the flesh is weak” one can say. The attitude has been ingrained into our DNA by an unending regime of incentives and subsidies, which have been inimical to the spirit of true entrepreneurism. Our innovative spirit has been misdirected towards ‘jugaad’ and ways to ‘beat the system’. Even in start-ups, one can argue, there have been next to none original breakthroughs like what say China has produced whether, TikTok or now DeepSeek. Ours have been mostly clones of international e-commerce, fintech and service delivery models largely focussed on the valuation game. Hence, so many stories of ventures going bust or getting mired with governance scandals. Our self-congratulatory claims on automobiles notwithstanding there is not a single Indian-designed car that has broken into the international markets, where Indian business houses are happy to acquire rights for manufacturing Chinese models in India. In short, “Make in India” has a long way to go. Premium on quality and efficiency To be fair though, India is being far more deliberate in selecting areas in which to compete globally. The government’s PLI (Production-Linked Incentive) scheme is a good move in that direction. Equally, despite usual controversies, encouraging large Indian conglomerates to enter the global infrastructure – a la Korea and China – is a smart strategy. However, to be the third-largest global economy, India’s real strength lies in its domestic market, which every country in the world – not just the USA and China – eyes. Merely ring fencing it with tariffs and regulations will not work unless we put a premium on quality and efficiency. This would be a prerequisite for becoming a China-Plus country. Hearing whispers about the government considering reimposing restrictions on FDIs in certain sectors and imposing counter tariffs raises apparitions of the old Licence–Permit Raj. True ‘Atmanirbhar Bharat’ would be standing up to the world in our own right rather than putting ourselves back inside a tent. (The writer is MD & CEO of Birla Corp) Published on May 25, 2025