Billionaire Anand Mahindra, chairman of India’s largest SUV maker, can’t understand why Indian markets seem perturbed by the threat of a global tariff war.
"Small, export focused countries stand to lose. Countries with large domestic economies can easily withstand tariff threats," Mahindra tweeted on Thursday.
As US President Donald Trump’s steel tariff prompts concern about retaliation and a trade war, the head of the $19bn Mahindra Group was quick to highlight India’s fortunate position as the world’s fastest-growing major economy. And one heavily focused on domestic consumption.
India is the third-biggest producer of steel, yet only 0.2% of the material it mills found its way to the US in January, according to data from the US government and the World Steel Association.
Instead, India’s steel factories are boosting production to keep up with Prime Minister Narendra Modi’s infrastructure plans as he aims to transform aging infrastructure across the country and create "smart cities", replete with affordable housing, improved sanitation and better transportation.
The government wants to boost per capita steel consumption to between 130kg and 140kg from 65kg.
India is also less likely to attract attention for its trade surplus with the US, which, at $22.9bn in 2017, was less than China prints in a single month.
Despite this, concerns about a trade war helped push the benchmark S&P BSE Sensex down 2.2% this week. A metals index of 10 companies including Tata Steel and JSW Steel sank 6.9%, the most since 2016, on concern that the local market would be flooded with supplies from surplus nations.
"India can stand tall in a trade war," Mahindra tweeted, given its access to global technology and capital to fuel innovative start-ups along with its ability to import the commodities the nation lacks. "The world needs access to the fastest-growing large economy — India."