U.S. tariffs are not what is holding back Indian research
This analysis argues that U.S. tariffs are not the primary cause of India's low research and development spending in key industrial sectors. It suggests that these industries were already under-investing in innovation long before trade tensions escalated, indicating a structural issue rather than a trade-related one.
Why it matters
It challenges common policy assumptions regarding the impact of trade protectionism on domestic innovation and industrial competitiveness.
Tariff wars with the United States have ebbed and flowed for years. After months of escalation, Washington and New Delhi stepped back a few months ago. The penalty tied to India’s purchases of Russian oil went, the reciprocal tariff was cut, and medicines and most electronics stayed exempt. Exporters treated it as relief. But an old worry in policy circles is worth testing: that high American tariffs will choke research in the industries that they touch, and set back India’s move into higher-value production.
That worry rests on a mistaken assumption that the sectors exposed to American tariffs are the sectors where India does its research.
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