The Voice News :Following a brief military conflict with Pakistan, India is entering a period of relative calm, with a ceasefire currently holding. This development is a relief for both the public and the business community, who are wary of the economic disruptions caused by past conflicts.
With stability returning, Indian policymakers are refocusing on key economic priorities: accelerating growth beyond the current 6% rate, finalizing a free trade agreement (FTA) with the U.S. before suspended 26% tariffs resume in July, and attracting foreign investment—particularly from companies like Apple—seeking alternatives to China. However, all of these efforts face significant challenges.
“There’s never a bad time for big reforms,” noted Richard Rossow, senior advisor at the Center for Strategic and International Studies in Washington, D.C. He pointed out that investors now have multiple options as global supply chains shift, and India’s recent pace of reform has slowed. While Finance Minister Nirmala Sitharaman outlined ambitious plans in her February budget, Rossow emphasized the need for concrete action.
Recent momentum has focused on two fronts. First, after securing a U.K.-India FTA, the Commerce Ministry is pushing to complete an agreement with the U.S. by July. A long-delayed India-EU FTA is also on the horizon. Second, optimism has been buoyed by Apple CEO Tim Cook’s comments that India could become a key manufacturing hub for iPhones. However, India’s rapid push for FTAs may underestimate the domestic impact—particularly among its protectionist business elite and vulnerable sectors like agriculture.
The Modi government has already faced backlash over previous farming reforms, and new trade deals could spark similar unrest. For example, lower tariffs on specific imports—such as lamb from the U.K.—could have social and political consequences. Additionally, the success of the government’s “Make in India” initiative largely depends on Apple expanding its manufacturing presence in the country.
Cook’s recent statement that most iPhones sold in the U.S. would soon be “Made in India” drew swift criticism from President Trump, who reportedly warned Cook that the U.S. was “not interested” in such a move. Trump later threatened a 25% tariff on smartphones imported into the U.S.—a stark reminder of the political risks involved in outsourcing production.
India’s manufacturing sector, which currently contributes 16% to GDP compared to China’s 26%, needs many more Apple-like investments to generate employment for its growing youth population. Any reduction in planned production would be a setback.
Despite these external uncertainties, India’s large population and expanding domestic market offer resilience. Still, to achieve its long-term growth targets, the government must implement deeper reforms to enhance productivity, competitiveness, and inclusion.
The key message for Indian policymakers is to look beyond short-term political noise—such as threats of tariffs—and focus on structural reforms. Doing so could unlock stronger and more sustainable economic growth in the years ahead.