Building India’s Economic Security: Amidst Global Trade, Investment, Currency and Aid Turmoil

By : Subhash Chandra Garg

Page No: 97-112

Abstract
The global economic, trade, aid and financial system is in big turmoil and transition, especially after the US President Donald Trump began dismantling the global trade and aid order. Economic security is multi-dimensional. While the ability to consume goods and services to meet a dignified standard of human needs is the consumption security, investment, trade, and aid security are also very important dimensions of economic security for India. India has been slapped with one of the highest tariffs (50%), with India’s purchase of Russian oil becoming a compounding factor in addition to high tariffs and non-tariff barriers. There does not seem to be a US centric solution in sight as India will not leave its self-imposed redlines on agricultural produce. Diversifying trade to other countries, and increasing domestic consumption might be the better way forward. India is witnessing subdued foreign direct investment flows, and there has been an increasing tendency for foreign portfolio investors to also reduce their investments in India. India had stopped taking foreign aid in the early 2000s, and it may not matter much for the USA to dismantle its aid agency and diplomacy. India remains vulnerable on the foreign exchange front as well. There are important developments in international currency markets with the advent of stablecoins. India needs to alter its attitude towards cryptocurrencies, most specifically stablecoins soon.

Author
Subhash Chandra Garg is the author of ‘The $10 Trillion Dream’ and a Former Finance Secretary.
 

DOI: https://doi.org/10.32381/IFAJ.2025.20.2.1