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Trump's policy curbs: New innovation order and India's strategic rise
Trump's policy curbs: New innovation order and India's strategic rise

Hindustan Times

time37 minutes ago

  • Hindustan Times

Trump's policy curbs: New innovation order and India's strategic rise

The flows of globalisation were once imagined catalysing a new world order based on leveraging trade, talents and innovation. However, what is now being witnessed under the second term of President Donald Trump in the US is a reversal of such flows. While the US seeks to Make America Great Again, a reduced role of the world's most powerful actor in pushing such flows not just create a vacuum for other actors in the international system, but also lead the system to suffer several strains. Policies under Trump 2.0, in the form of tariffs and visa restrictions, as well intended as they may be for America's safeguarding of its sovereignty and prowess, are disrupting traditional economic and talent flows. Iran Israel War Live Updates: President Donald Trump said Iran should have signed a deal with the United States. (AFP) Extremely high tariffs, such as the proposed 100% duties on BRICS countries, aim to reshore manufacturing to the US, but they also risk increasing costs, while companies are pushed to seek alternatives outside China. How well this pans out for the US as well as other economies is something that is to be watched out for. Restrictions on H1-B visas and optional training programs, similarly, limit access to global talent, potentially creating skill gaps in US tech sectors. While it is the sovereign right for the US to decide what role it wants to play in the existing world order, other countries need to look out for themselves and turn adversities into opportunities. Disruptions to innovations in the US have been driving innovation to other hubs, as companies and talents seek environments with fewer restrictions and lower costs. Countries like India, Germany and Canada have been emerging as alternative hubs. In fact, the US's tightened visa policies have already led to a 15% rise in Indian student applications to Canadian Universities and increased interest in Germany's no-tuition public universities. In June this year, speaking in New Delhi, German ambassador to India, Philipp Ackermann stated that there are already 50,000 Indian students in Germany and the country is keen to welcome more. Meanwhile, US tech giants, which have been reliant on foreign talent, could face labour shortages, prompting companies to expand research and development centres abroad, particularly in India, where local talent, owing to the positive demographic dividend that India has; is abundant and costs are competitive. What this sort of decentralisation of innovation could lead to is a reduction of the US's dominance in tech, and could create a more multipolar innovation landscape. India, in fact is uniquely positioned to capitalise on these shifts owing to its robust IT sector, growing manufacturing capabilities and strategic alignment with US interests, particularly in countering China's influence. The push under Trump 2.0 to reduce reliance on Chinese tech firms, aligns with India's own efforts to limit Chinese influence in cybersecurity and telecommunications. As US forms diversify away from China, India is positioned as a prime destination for investment in semiconductors, 5G and AI. Indian tech giants such as Infosys, Wipro and TCS, could see increased demands as US companies expand operations in India. Additionally, restrictive H1-B policies may drive Indian tech professionals to build domestic startups, and help India in reducing brain drain, while further fostering India's own Silicon Valleys. In any case, US companies, seeking alternatives to Chinese manufacturing have been increasingly turning to India, particularly in auto components, pharmaceuticals and chemicals for example. In the realm of education and talent development, India can capitalise on the opportunity created by visa restrictions in the US, by expanding its own higher education system. Joint degree programmes with US institutions, potentially ties to Fulbright-Nehru scholarships can go a long way in attracting talents and fostering innovative ecosystems. The process has already started, as foreign Universities, are increasingly establishing a presence in India, driven by the National Education Policy (NEP), and the University Grants Commission regulations of 2023. Top global Universities, that are ranked in the top 500 globally or in specific subjects are to set up branch campuses, and to collaborate with Indian institutions. The path ahead for India however has challenges as well, and India has to navigate potential trade wars and further visa restrictions that can strain its $ 254 billion tech sector, which relies heavily on the US market. Diplomatic statecraft will be more crucial than ever to maintain strong bilateral ties, particularly given Trump's transactional approach. Preparing itself through further investments in education and tech is a necessity for India to navigate these challenges. Trump 2.0's restrictive policies, while immensely challenging should also be seen as a catalyst for global innovation, with India poised to emerge as a leading actor. Leveraging its tech prowess, manufacturing potential and through educational reforms, India can envisage turning these curbs into opportunities which will strengthen its economic and strategic standing. This article is authored by Sriparna Pathak, professor, China Studies and International Relations, Jindal School of International Affairs, OP Jindal Global University, Sonipat.

Chinese ships seen near Senkakus for record-tying 215th straight day
Chinese ships seen near Senkakus for record-tying 215th straight day

The Mainichi

time38 minutes ago

  • The Mainichi

Chinese ships seen near Senkakus for record-tying 215th straight day

NAHA (Kyodo) -- Chinese coast guard ships were spotted near the Senkaku Islands in the East China Sea for the 215th consecutive day, the Japan Coast Guard said Saturday, matching the longest streak since Japan put the islets under state control in 2012. The group of uninhabited islets, which China claims and calls Diaoyu, has long been a source of friction between the Asian neighbors. Four Chinese coast guard ships equipped with autocannons were confirmed to have sailed in the contiguous zone just outside Japan's territorial waters on Saturday, the Japan Coast Guard said. The Japan Coast Guard warned the ships not to approach Japanese territorial waters. The previous 215-day streak of Chinese ships sailing near the Senkakus ended on July 23, 2024, likely due to the approach of a typhoon.

US tariff spike hits China's small parcels, squeezing exporters
US tariff spike hits China's small parcels, squeezing exporters

Time of India

time39 minutes ago

  • Time of India

US tariff spike hits China's small parcels, squeezing exporters

US tariff hikes on small packages from China triggered a slump in shipments last month, contributing to a huge drop in bilateral trade and roiling exporters like Shein Group Ltd . The value of small parcels sent from China to the US fell to just over USD 1 billion in May, the least since early 2023, according to customs data released Friday. The 40 per cent plunge from the same month last year marks a sharp reversal for a booming trade route, coming just as the US government eliminated a long-standing tariff loophole. The policy shift is upending the business models of fast-fashion titan Shein and its rival Temu, which relied on the exemption to send goods directly to US customers free of tariffs. It's also squeezing thousands of small merchants who relied on the model as a low-cost entry into the world's largest consumer market. 'Without the exemption, it would mean tougher business to us, and much fewer options for consumers, and potentially higher prices,' said Wang Yuhao, whose Kunming-based incense company, Shantivale, recently began selling to the US. 'This is a lose-lose situation.' For the entrepreneur, the new tariffs and logistical fees of direct shipping now would mean losing USD 2 on every parcel. To avoid the additional cost, Wang said he has pivoted to bulk shipments to US warehouses, a move that demanded an upfront investment of more than 100,000 yuan (USD 13,800) for inventory and storage. The source of the disruption is the end of the 'de minimis' rule exemption for Chinese and Hong Kong shipments. Previously, packages valued under USD 800 could enter the US duty-free. Since May 2, those parcels face tariffs as high as 54 per cent after the Trump administration moved to close what it deemed an unfair trade loophole. The impact on the largest players was swift. Shein raised US prices on items from dresses to kitchenware ahead of the hike to cover the costs of the higher tariffs, according to data compiled by Bloomberg News. In the week after the tariffs took effect, both Shein and Temu saw double-digit sales declines, an early sign the punitive measures are eroding their popularity. Even with the drop, the US remained the largest single destination for China's small parcels, the data showed. Malaysia followed by taking more than USD 700 million worth of such shipments last month. Globally, small parcel shipments rose 40 per cent in May compared to a year ago, with Belgium, South Korea, Hong Kong and Hungary among other large destinations.

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