Harsha Vardhan

Co Founder - Arthashastra Intelligence (@artha_tweet) "Data"- you now have my curiosity | Global Trade | Economist | UoB | SSSIHL Swadeshi Jagaran Manch(SJM)

[Harsha Vardhan @harshas_tweet]

Tariffs here and Tariffs there. Not many realize that these decisions affect real people and real business.

We got this email for one of our clients from a buyer in the USA. For context: this particular company was buying an agricultural product of about 11L per month, roughly 200 tons. Now? Down to an absolute zero.

If you’re wondering how the buyer would manage their business by cutting down on such a huge supply? Well, they’d rather do anything than bleed money. And that’s where the whole geo-political role of Tariffs comes into play. If there’s any country that has a lesser Tariff or a trade deal with the USA, they become the favourable sourcing destination.

Does that make India irrelevant in the global economy?

No! We must keep remembering that the US market is not the entirety of the global market. After we got this email, we didn’t stop. We approached a market at the absolute other end of the geopolitical spectrum: Russia. You won’t imagine the potential that it holds for India is immense.

Here’s a list of things that have happened:

1. Trump announces 25% tariffs + Penalty

2. Markets free fall

3. India is reviewing options

4. Trump asks India to stop buying oil from Russia threatening higher tariffs.

5. India calls out the USA for double standards

6. Trump says he will increase tariffs in the next 24 hours.

What might happen next? Well, Russia has called off the nuclear agreement with USA while the USA has put up two nuclear subs near Russia.

Let’s not be surprised if someone thinks this is a video game and presses the graphic button!

[Harsha Vardhan @harshas_tweet]

No other person can explain the geopolitics and trade better than Prof @ashwani_mahajan. A must watch episode for all those who are in the world of geopolitics and economy.

Rightly pointed by Sir, Swadeshi in key sectors along with a strong export economy is what can propel India.

https://t.co/vgBuaIrNVA

[Harsha Vardhan @harshas_tweet]

Rupee-Rouble Rate : How India is shaping International Trade Dynamics

In the wake of the Ukraine conflict, India has dramatically increased its oil purchases from Russia, leading to a surplus of rupees sitting in Russian banks' vostro accounts in India. Now, imagine if we could put those rupees to work for us, strengthening our economy while reducing our reliance on the US dollar.

The idea of a direct rupee-rouble exchange rate is more than just a financial strategy—it's a step toward greater economic independence for India. By bypassing the dollar, we lower transaction costs and simplify trade, making it more efficient and less expensive. This isn't just a technical shift; it's a bold move that can enhance our trade and deepen our ties with Russia, a key ally in sectors like energy and defense.

But it doesn’t stop there. By allowing Russian banks to invest these surplus rupees in our markets, we open the door to increased foreign investment in India. This means more liquidity, more growth, and more opportunities for every Indian. It’s about using our resources smartly and ensuring that the benefits of global trade flow back into our economy.

This move is also part of a broader, global trend—de-dollarization. Countries around the world are exploring alternatives to the US dollar in international trade. We’ve seen this in the China-Russia yuan-rouble trade, Brazil's decision to use its own currency in trade with Argentina, and the UAE-India agreement to settle trade in rupees and dirhams. Now, India is taking a decisive step by establishing a rupee-rouble market.

This is not just about economics—it's about national pride. It's about taking control of our financial destiny and standing strong in a world where power often rests with those who control the currency. The rupee-rouble market could be the key to a more self-reliant India.

PS - A Vostro account is a type of bank account that one bank holds on behalf of another, typically a foreign bank.

#EconomicIndependence #IndiaRussia #RupeeRouble #DeDollarization #GlobalTrends #IndianEconomy

[Harsha Vardhan @harshas_tweet]

Rupee-Rouble Rate : How India is shaping International Trade Dynamics

In the wake of the Ukraine conflict, India has dramatically increased its oil purchases from Russia, leading to a surplus of rupees sitting in Russian banks' vostro accounts in India. Now, imagine if we could put those rupees to work for us, strengthening our economy while reducing our reliance on the US dollar.

The idea of a direct rupee-rouble exchange rate is more than just a financial strategy—it's a step toward greater economic independence for India. By bypassing the dollar, we lower transaction costs and simplify trade, making it more efficient and less expensive. This isn't just a technical shift; it's a bold move that can enhance our trade and deepen our ties with Russia, a key ally in sectors like energy and defense.

But it doesn’t stop there. By allowing Russian banks to invest these surplus rupees in our markets, we open the door to increased foreign investment in India. This means more liquidity, more growth, and more opportunities for every Indian. It’s about using our resources smartly and ensuring that the benefits of global trade flow back into our economy.

This move is also part of a broader, global trend—de-dollarization. Countries around the world are exploring alternatives to the US dollar in international trade. We’ve seen this in the China-Russia yuan-rouble trade, Brazil's decision to use its own currency in trade with Argentina, and the UAE-India agreement to settle trade in rupees and dirhams. Now, India is taking a decisive step by establishing a rupee-rouble market.

This is not just about economics—it's about national pride. It's about taking control of our financial destiny and standing strong in a world where power often rests with those who control the currency. The rupee-rouble market could be the key to a more self-reliant India.

PS - A Vostro account is a type of bank account that one bank holds on behalf of another, typically a foreign bank.

#EconomicIndependence #IndiaRussia #RupeeRouble #DeDollarization #GlobalTrends #IndianEconomy

[Harsha Vardhan @harshas_tweet]

⌛ India-UK FTA: Are We Finally There?

The political situation in the #UK has shifted with the #LabourParty 's recent victory in the 2024 elections. While it's a bit disappointing to see #RishiSunak go, I'm actually quite optimistic about what this means for #India-UK trade relations.

The big news? We might see the India-UK Free Trade Agreement (#FTA) signed by the end of the year. This has been in the works since 2022, with 14 rounds of talks already completed. The Labour Party seems to recognize the huge potential here.

What's in it for both sides? UK businesses get better access to our growing market, while we can bypass some of those high tariff barriers. Our #BilateralTrade has already grown from $17.5 billion in FY22 to $20.36 billion in FY23. Imagine what we could achieve with this #FTA in place!

However, there are a couple of key issues we need to keep an eye on:

1. The UK's Carbon Border Adjustment Measure (#CBAM) - We need to understand how this will affect our exports. High carbon taxes could eat into the benefits of reduced tariffs. This in growing trend with western economies imposing non tarriff barriers to restrict imports.

2. Non-traditional subjects in the FTA - Things like labour standards, environmental policies, and intellectual property rights. We need to be careful about how these are included, as they could impact our domestic policies.

With a few tweaks, like adjusting the number of visas for Indian professionals, the Labour Party is likely to give it the green light. While these are my initial thoughts Arthashastra Intelligence will be coming up with a detailed report on possible implications

What it could mean for trade on both sides. What do you think? How do you see this FTA impacting your industry?

#IndiaUKTrade #FTA #InternationalTrade #LabourParty #RishiSunak #AITradeMusings

[ASHWANI MAHAJAN @ashwani_mahajan]

Fortune India: Business News, Strategy, Finance and Corporate Insight https://t.co/n3k08Ijeva

[Harsha Vardhan @harshas_tweet]

#TradeDisputes #AntiDumpingDuties #ChinaAustraliaTrade #WTO #InternationalTrade #TradeRegulations #SteelIndustry #Tariffs #EconomicPolicy

[Harsha Vardhan @harshas_tweet]

Trade disputes can get pretty intense! Here's a recent one between China and Australia regarding anti-dumping duties that caught everybody’s attention.

[Harsha Vardhan @harshas_tweet]

This incident shows how complex international trade can be. Countries need to protect their industries, but they have to do it fairly and follow international trade rules in compliant with the WTO rules.

[ASHWANI MAHAJAN @ashwani_mahajan]

Punjab to Andhra to Telangana—state govts’ spending on freebies harming India’s growth story. Take a lesson from Latin America: Countries like Argentina and Venezuela also adopted such freebies schemes. Today, these countries are going through terrible debt, inflation, and economic crisis. https://t.co/tOjV6UfX9t

[Surya Kanegaonkar @suryakane]

Large, populous nations that seek success must embrace periods of protectionism. The bigger the nation, the greater the pressure to deliver on employment. Political power is ultimately derived from the people’s welfare, even if it varies significantly between democracies and autocracies. Since the time China took steps to liberalize its economy, the Communist Party’s fortunes and state writ have consistently been tied to generating jobs and wealth. China’s most abundant resource - its people - were seen as capable of delivering economies of scale, and that required carefully planned industrial policy.

The Party learned from its own shortcomings in the Great Leap Forward and the USSR’s failings during the Cold War. Given the US-led neoliberal system, Beijing found that the best way to grow involved integrating and eventually dominating global value chains. Market share was found to beget profits and cross-subsidies helped create champions in new domains. Industrial policy in one sector helped another, from natural resources to midstream goods production and more recently, to retail.

What sets China apart from other nations is how Beijing views the entire country as a single machine with many moving parts. This behemoth is designed to grow in scale, competitiveness and complexity. Comprehensive National Power develops as a result. Of course, this style of state capitalism requires centralization of authority on one hand and devolution of specific powers on the other to incentivize intra-nation competition. A closed system with the right incentive structures within it can become competitive in the free global market.

India has a lot to learn from the Chinese experiment. In many ways, India will evolve into a hybrid of China and the US. Centralization of power and dominance of a single political party is democratically receiving a widespread buy-in from the public. State banks have been revived to push healthy, debt-fueled growth. Simultaneously, Public Sector Units and government regulation and intervention are used to protect critical sectors. That said, PSUs will remain a shadow of their Chinese counterparts, the SOEs, at least in non-critical sectors. National champions are getting built through close coordination between the state and major players from the private sector.

Unlike China where local consumption peaked against the backdrop of a rapidly aging population, India can create a strong consumption profile for decades. This is largely down to an organically evolving population pyramid. To some degree, this is similar to the US and therefore demands a low-friction, harmonized and efficient domestic market.

India identified that its main drawback was a relatively fragmented domestic economy. Heavy investments in infrastructure have been done with the intent of removing bottlenecks. Going forward, land, labor and agricultural reforms amongst other systemic changes will be critical for improving productivity, domestic demand and by extension, capacity for exports.

Consensus formation is accelerating but must be faster given a two decade window to industrialize. India can achieve several decades of wealth generation by balancing export-led growth with domestic demand-led growth. No doubt, the PLI schemes form an important pillar of the country’s industrial policy. They will be expanded to replicate China’s success in areas like electronics, mobility, defense, energy, white goods and natural resources. Self-sufficiency ensures supply chain security. It also sets a low ceiling for inflation and in turn, interest rates. Lending, private capital expenditure and small business growth flow directly from this, building out a a comprehensive industrial and services ecosystem.

[ASHWANI MAHAJAN @ashwani_mahajan]

In the past, developed countries were successful in getting most of their demands accepted in the name of consensus. India and other developing countries, which did not agree with their proposals, also bowed down to the arbitrariness of developed countries for fear of being considered as deal blockers. But this time the ministerial conference was somewhat different, because India outright rejected their arbitrary stance. https://t.co/f2hIlMxdU8

[ASHWANI MAHAJAN @ashwani_mahajan]

SJM @swadeshimanch said failure of the 13th Ministerial Conference in Abu Dhabi, the UAE, was a success for India, which has been fighting the cause of developing nations in the WTO. Organisation said India should be seen as a savior (of developing and least developed countries), and not as blocker (of consensus at the WTO) https://t.co/Iz42iXMPGw

[ASHWANI MAHAJAN @ashwani_mahajan]

According to an official communique during the WTO conference, SJM said, “We wish to highlight that the present attempt of the WTO secretariat at the behest of certain global powers, including China, is completely illegal. There are several legal issues involved in the process of adding IFA as a plurilateral agreement to Annex 4.”https://t.co/JFCJOHm2fh CC @ArunAnandLive