The towering walls of import tariffs erected by US President Donald Trump have unleashed an economic crisis upon a vast section of Indians working in labour intensive industries. The central question becomes: how will the suffering of these people be reflected in governmental policy? Will the government adopt a conciliatory stance towards the US, or will it embrace a purportedly nationalist position, equating compromise with abandoning national pride?

In this context, Prime Minister Narendra Modi's declaration of "Swadeshi" serves as an invocation of such nationalist sentiments.  Can the call for self-reliance still resonate within today's intensely globalised economy? Apparently, it can. Otherwise, why would a political leader with an acute understanding of the public's pulse, possessing a formidable ability to tap into their emotions, invoke the term "Swadeshi."?

Let us consider a hypothetical scenario. Imagine that a European dairy-producing nation exports its highly subsidised dairy products to India. This causes a collapse in domestic milk prices, severely impacting Indian farmers. Were this to occur, Indian politics would erupt. The government would face intense criticism, and would be compelled to halt this "dumping" of milk.

This example is not fictional; a similar situation unfolded in India two decades ago when a large influx of powdered milk from Denmark entered the market, with import duties at zero percent. A massive uproar ensued, forcing the government to take swift action to protect its farmers.

Today, the situation is reversed, but the consequences remain the same. The American import tariffs have triggered a significant economic crisis for Indian industries such as textiles, leather goods, shrimp production, and jewellery manufacturing. These are all labour-intensive sectors. Industries that manufacture agricultural machinery and automobile parts are also experiencing a significant impact on their exports.

In some parts of the country, textile production has already ceased. At least three hundred thousand jobs are immediately at risk, with a hundred thousand of those being in the textile industry alone. The majority of these workers are unskilled, making their transition to other industries unlikely.

While there is certainly an atmosphere of concern within the country, the question remains: will the government face the same level of pressure as it did during the milk powder dumping crisis? Will the government take similar steps to protect its affected citizens as it did for the dairy farmers?

Taking such steps, however, would imply compromising with the United States. While increasing import tariffs to curb foreign imports can be framed as an act of nationalism, negotiating with the American government to reduce its imposed tariffs does not carry the same nationalist appeal. On the contrary, it risks portraying the government as yielding to American dominance.

A nationalism that results in self-inflicted wounds is often rooted in feelings of inferiority. Such a nationalism is prevalent today. It fosters an excessive preoccupation with "where we stand in comparison to advanced nations," leading to a collective sense of inadequacy.

Subsequently, we are overcome with excitement at the sight of our Prime Minister endorsing a candidate for the presidency of a wealthy and powerful nation, forgetting that this candidate's ideology clashes with institutions like the WTO that regulate international trade. Our inferiority complex blinded us to this peril.The threat went unnoticed.

What are our psychological needs today? Now that the image of Trump with our Prime Minister in the famous ‘Ab ki baar Trump Sarkar’  rally in Texas has faded from our mental landscape, does the new image of our Prime Minister standing shoulder-to-shoulder with powerful leaders like Putin and Xi Jinping satisfy our psychological cravings?

If so, this makes it difficult for the government to be pressured to protect the millions harmed by American import tariffs.

This is because politics is driven by emotions, and economic issues struggle to compete.

Why the 'Swadeshi' call is useless to the affected people

Therefore, the rhetoric of self-reliance is a warning sign for the millions imperilled by the import tariffs. While this rhetoric may evoke a nationalism that refuses to bow to American bullying, it offers no practical solutions for those affected. The income of those rendered unemployed by Trump's import tariffs stems from the willingness of wealthy American consumers to pay a premium for their products. Domestic markets do not offer comparable prices, which is precisely why exports occur.

This means that the "Swadeshi" call is useless to these affected people. Finding alternative markets is a long-term endeavour, while what is needed is immediate relief from the current crisis.

Government's position on agriculture is understandable and defendable. A large portion of our population remains dependent on agriculture. Therefore, seeking freedom to retain tariffs to protect this sector, and making efforts to reduce or negotiate the import tariffs imposed by other countries to prevent a decline in exports, are equally important.

Many Indians who celebrated Trump's potential return to the presidency now frame America as plotting against India. If this sentiment gains traction, and the public demands a forceful response from the central government, the crisis triggered by the import tariffs could deepen.

The critical question moving forward is whether the government will prioritise nationalist politics or adopt a conciliatory approach toward the United States. Trump's trade advisor, Peter Navarro, has stated that if India ceases importing oil from Russia, import tariffs could be halved.

Economist Raghuram Rajan has raised a particularly insightful question in this regard: "Who precisely benefits from the policy of purchasing oil from Russia? And should a portion of the profits accruing to these beneficiaries be allocated to those harmed by the import tariffs, given that the imposition of these tariffs is, in effect, a consequence of the decision to import oil from Russia?"

If Peter Navarro's claim is credible, will the government prioritise protecting the livelihoods of its poor, even if it means appearing to compromise with the US to some extent? Could the government articulate  a vision of nationalism where the needs of the poor take precedence?

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