The weaponisation of tariffs and export controls is forcing India to find trade partners who are more trustworthy, reliable and transparent, external affairs minister S Jaishankar said on Wednesday.
Speaking at the Raisina Dialogue, India’s flagship conference on geopolitics, the EAM made no direct reference to US President Donald Trump’s threat to use tariffs against a range of partners and said the focus should be on bolstering business while navigating the weaponisation of financial flows and technology.
“Tariffs, sanctions, export controls – whether we like it or not, they are a reality, countries use them. If one looks at the last decade, we have seen a much greater weaponisation of pretty much any kind of economic activity,” Jaishankar said at a session with the theme ‘Commisars and Capitalists: Politics, business and new world order’.
His remarks came against the backdrop of Trump threatening to hit trade partners with reciprocal tariffs from April 2. India is currently negotiating with the US to finalise the first tranche of a bilateral trade deal by the fall. New Delhi has also continued buying large volumes of oil from Russia, which has been hit with Western sanctions over the invasion of Ukraine.
Jaishankar pointed to several ways of dealing with the weaponisation of trade, including staying on the “right side of the weapon so you don’t get hit”, and finding more trustworthy partners that present fewer risks. “The world today makes business decisions factoring in national security in a manner in which it did not do so before, especially in the digital era,” he said.
{{/usCountry}}Jaishankar pointed to several ways of dealing with the weaponisation of trade, including staying on the “right side of the weapon so you don’t get hit”, and finding more trustworthy partners that present fewer risks. “The world today makes business decisions factoring in national security in a manner in which it did not do so before, especially in the digital era,” he said.
{{/usCountry}}“In the digital era, it’s not just about cost, it is about comfort and trust. If you are today looking at a strategic level, the business conversations you keep hearing [are about] resilience, reliability, trust, transparency. You want to do business more and more with those with whom you are secure,” he said.
India is engaged in negotiations for trade deals with the UK, the European Union (EU) and the US as these are the country’s growth markets and technology and connectivity partners, as well as regions where Indians travel for education and tourism. “When we make choices, it’s no longer just about efficiency and cost. There are non-economic factors which increasingly influence business decisions,” he said.
Jaishankar emphasised the need for regulations for big data for trade deals and the evolution of artificial intelligence (AI). “It does matter where our data goes, who looks at our data, who processes it, who develops the AI based on our data. We can’t be agnostic in the digital era,” he said.
In this sphere too, reliability and trust are crucial, especially as national competition increases in business and innovation. “India must play to its strengths – a huge amount of data because there’s a large population and an enormously diverse society...We have to make the most of it and...I would max it for myself,” he added.
Responding to a question on whether the Trump administration is seeking to create a new world order, Jaishankar said, “If your question is what the US is doing, you should ask the Americans, not me...We should be doing many things, including engaging the Americans and engaging the Global South. Our effort is to maximise our options to increase our turnover, to improve our technology.”
Joel Kaplan, chief global affairs officer of Meta, while participating in the discussion, noted the Trump administration has a different orientation towards social media companies and American tech firms, and is interested in promoting American technology and “advancing Western values in technology”. At the same time, the Trump administration is “defending American tech companies against what they perceive to be discriminatory regulations...particularly in the EU”.
Pierroberto Folgiero, CEO of Italian shipbuilding major Fincantieri, emphasised the importance of technology driven shipbuilding in an era when Western countries were seeking to rebuild in the sector after losing the advantage to China and South Korea, which build a majority of the world’s merchant vessel.
“China has a long-term view of the importance of the maritime economy, starting from shipbuilding, moving to logistic business all the way to owning port infrastructure. Now, it’s time to rebalance all this,” he said, adding that India can play an important role because of its engineering and manufacturing capabilities, fabrication of key systems for ships and labour.
Marianne Demarchi, CEO for Europe, Middle East and Africa for the Swift payment system, highlighted the dangers posed to economic growth by the proliferation of digital payment systems and central bank digital currencies that are not interoperable.