With two weeks left earlier than US president Donald Trump’s April 2 deadline for imposing reciprocal taxes on imports, India is already in damage-control mode, bracing for potential financial disruptions.

Indicators of a strategic shift are rising, as seen within the sudden embrace of Elon Musk’s Starlink Inc. by two of India’s largest telecom firms—whose billionaire homeowners had beforehand opposed his market entry.

A prime authorities minister even posted (and later deleted) a message on X welcoming Starlink, regardless of the satellite tv for pc broadband service nonetheless awaiting regulatory approvals.

Whereas prime minister Narendra Modi has not responded to the opposition Congress Social gathering’s claims that these offers have been orchestrated “to purchase goodwill with Trump,” latest developments point out a notable change in India’s strategy to commerce and its billionaire class.

Final month’s discussions about decreasing Tesla’s import obligation from 110 per cent to a considerably decrease charge additional counsel a shift away from long-standing protectionist insurance policies.

For the previous decade, Modi’s financial technique has relied on shielding a choose group of Indian enterprise giants from international competitors. Tariffs that had dropped near China’s 7 per cent ranges in 2011 have been raised to 12 per cent by 2022—among the many highest on the planet.

Along with tariffs, these billionaires benefited from favorable authorities contracts and non-tariff boundaries, equivalent to stringent rules for foreign-backed companies.

Robert Lighthizer, the U.S. Commerce Consultant underneath Trump 1.0, had a transparent understanding of this dynamic. In his 2023 e-book, he revealed that he saved biographies of about 15 Indian enterprise tycoons on his desk whereas negotiating with New Delhi. “In predicting Indian authorities positions, I’d look to the pursuits of those males,” he wrote.

Analysis confirms the rising dominance of India’s prime enterprise conglomerates. The share of non-financial belongings held by Mukesh Ambani, Gautam Adani, Tata Group, cement tycoon Kumar Mangalam Birla, and telecom mogul Sunil Mittal rose from 10 per cent in 1991 to 18 per cent by 2021.

Former Reserve Financial institution of India deputy governor Viral Acharya has famous that these teams expanded quickly post-2014, buying dominant positions in sectors equivalent to telecom, media, retail, ports, airports, constructing supplies, and vehicles. With excessive tariffs limiting international competitors, they’ve flourished in a largely protected home market with out having to compete internationally.

The return of Trump might disrupt this fastidiously constructed financial order. With the April 2 deadline looming, India’s Commerce Ministry is urging exporters to “come out of their protectionist mindset.” However it’s not simply exporters who have to adapt—the federal government itself faces mounting stress to recalibrate its stance.

Trump’s push for India to purchase extra from the U.S. has put Modi’s administration in a troublesome place. The U.S. has highlighted India’s steep 39 per cent tariffs on agricultural merchandise—eight occasions greater than what Washington imposes.

Nonetheless, Modi’s uneasy relationship with North Indian farmers, who rejected his earlier makes an attempt at market-based pricing reforms, makes it politically dangerous to decrease agricultural commerce boundaries. As an alternative, the burden of accommodating Trump’s calls for could fall on India’s billionaire class.

India’s company giants are unlikely to just accept these modifications with no struggle. Studies counsel that New Delhi has requested producers to exchange Chinese language parts with American options—a pricey transition that has already sparked resistance.

Inside India’s bureaucratic circles, issues are rising that the nation has leaned too far towards the West, doubtlessly compromising its strategic autonomy.

If Tesla is granted particular entry into India, some argue that China’s BYD Co. also needs to be given the inexperienced mild to arrange native manufacturing with an Indian companion. This raises broader questions on India’s commerce coverage: ought to it proceed prioritizing Western partnerships on the expense of strengthening regional financial ties?

India’s long-standing ambition to emulate China’s financial success—whereas holding Beijing at arm’s size—now faces severe hurdles. Regardless of its push for home manufacturing, manufacturing facility output contributes simply 13 per cent to GDP, its lowest share since 1960.

In the meantime, India’s commerce deficit with China has doubled over the previous decade, underscoring its deep financial reliance on its northern neighbor.

On the similar time, Trump is focusing on India’s almost $50 billion commerce surplus with the U.S.—its largest export market.

This stress comes at a difficult second, with home demand slowing and inventory markets reeling from a $1.3 trillion decline. Modi’s authorities could try and delay reciprocal tariffs to purchase time for broader commerce negotiations with Washington.

However the latest surge in enthusiasm for companies aligned with Trump’s financial imaginative and prescient sends a transparent message to India’s billionaires: the state’s protecting embrace is loosening.