Content :
- Sent messages
- Where tariffs trump economics
Sent messages
Context : In a targeted terror attack in Pahalgam, militants killed Hindu tourists and a Kashmiri local, aiming to disrupt Kashmir’s tourism-driven economy and communal harmony. The incident challenges the narrative of normalcy post-Article 370 and calls for a united Centre–State response.
Relevance : GS 3(Internal Security)
Practice Question : The recent Pahalgam terror attack reflects the persistent threat of cross-border terrorism and attempts to disrupt India’s internal social fabric. In this context, discuss the need for a multidimensional response combining security, diplomacy, and social integration. (250 words)
Terror Attack: Message & Strategy Behind It
- Targeted communal harmony: Attackers specifically targeted tourists based on religion, undermining India’s secular ethos.
- Symbolic site: Pahalgam is a tourist hotspot—by hitting it, terrorists aimed to disrupt economic normalcy in Kashmir.
- Kashmiri victim: A local who tried to help was also killed — signaling retribution to Kashmiris cooperating with India or aiding victims.
- Timing: Occurred during the visit of U.S. Vice President, possibly to embarrass India diplomatically and question its narrative of peace post-Article 370 abrogation.
Economic Fallout & Psychological Impact
- Tourism dependency: Thousands of locals rely on tourism; attacks generate fear among tourists and economic distress for Kashmiris.
- Spillover fear: Risk of repeat attacks may dissuade visitors long-term, undoing years of revival in the valley.
- Perception of instability: Such events puncture the narrative of “return to normalcy”, heavily promoted post-2019.
Political Response & Diplomatic Dimensions
- Diplomatic response to Pakistan:
- India has activated strong diplomatic channels, blaming Pakistan-backed elements.
- Reiterates the long-standing accusation that Islamabad enables cross-border terrorism through proxies.
- Definition of normalcy questioned:
- Absence of large-scale violence ≠ peace; sporadic killings continue.
- “Normalcy” must be felt on the ground, not declared from the top.
Democratic Process & Governance Gaps
- Post-Article 370 governance void:
- Political activities remain highly curtailed in J&K.
- No elected government; governance is seen as remote and bureaucratic.
- Recent elections:
- Lok Sabha and upcoming Assembly elections offer a limited platform for political expression.
- But this alone doesn’t substitute for full democratic engagement.
Recommendations: Coherent & Coordinated Action
- New Delhi & Srinagar must act jointly:
- Not just military or administrative actions — needs political coherence.
- Restore Statehood:
- Essential for legitimacy and trust-building in local governance.
- Signals intent to empower Kashmiris politically.
- Unite against terror, not people:
- The message must be that India stand united against terrorism.
- Avoid alienating locals through blanket suspicion.
Conclusion: Coercion Alone Is Insufficient
- Long-term peace demands:
- Political inclusion,
- Economic rebuilding,
- Social trust.
- Isolating terrorists requires strategic empathy, grassroots empowerment, and institutional collaboration.
Where tariffs trump economics
Global Context: Rising Protectionism
- The U.S. has imposed reciprocal tariffs, triggering a global trade war-like environment.
- Crude oil prices have dropped by 14%, and markets are volatile due to fears of global economic slowdown.
- While developed countries can retaliate, developing economies face a double burden: external shocks and domestic policy challenges.
Relevance : GS 2(International Relations)
Practice Question: Discuss the implications of the recent rise in global protectionism and tariff wars on India’s trade policy. What steps should India take to mitigate the economic impact and seize potential opportunities?
Understanding Reciprocal Tariffs
- Defined as retaliatory taxes imposed in response to another country’s tariffs.
- Aims: protect local jobs, industries, and fix trade imbalances.
- Drawbacks:
- May escalate into tit-for-tat tariff wars.
- Disrupts global supply chains and raises prices for consumers.
- Slows economic growth globally.
- Tariffs have shifted from revenue tools to protectionist and negotiation instruments.
Impact on Asia
- Southeast and South Asian countries are disproportionately affected:
- Vietnam: U.S. exports = 30% of GDP; hit by 46% tariff.
- Cambodia: 25% of GDP from U.S. exports; faces 49% tariff.
- Smaller nations lack capacity to retaliate like China; left only with negotiation tools.
- Cambodia’s garment sector employing 7.5 lakh workers is severely threatened.
Flawed Tariff Calculation Method
- Formula: (U.S. trade deficit with country ÷ exports) ÷ 2 + 10% base tariff.
- Problems:
- Assumes low price elasticity (0.25), but actual elasticity is closer to 1.
- Doesn’t differentiate between countries with open vs. closed markets.
- Considers only goods, ignoring services exports (like IT, finance).
- Countries with low goods exports but high services (e.g., U.K., Singapore) get unfair advantage.
India’s Concerns and Roadmap
- India exported $89 billion in goods to the U.S. in 2024.
- Tariffs may cause a 6.4% drop (~$7.76 billion) in exports to the U.S.
- Strategic imperatives for India:Secure a balanced trade deal with the U.S. through negotiations.Fast-track FTAs with EU, U.K., and Canada.Deepen ties with Russia, Japan, South Korea, ASEAN, and UAE.Manage China ties carefully, with both caution and cooperation.
Opportunity or Illusion?
- Apple’s iPhone export success (up 54%) often cited as a case for optimism.
- However, total goods exports remained stagnant at $437 billion in 2024–25.
- Structural reforms needed to truly benefit from shifting global trade:
- Rationalised tariffs.
- Simplified GST structure.
- Streamlined trade processes.
- Transparent and fair quality control mechanisms.
Conclusion
- The global tariff race is not purely economic but heavily political and strategic.
- India must avoid short-sighted protectionism and instead:
- Expand trade horizons.
- Strengthen domestic competitiveness.
- Engage multilaterally with agility and vision.
