Instead of depending on the U.S much, India should strongly stay with the Asian side of the markets as this region has a great growth potential, said Claude Smadja, formerly Managing Director of the World Economic Forum, who has over five decades of experience in geopolitics and global trade.
“Japan has always been looking for a greater relationship with India, similarly many other geographies in the region. India has to explore this interest from its Asian neighbours instead of just depending much on the U.S. alone,” Mr. Smadja told The Hindu.
He further said there was no notion of ‘fairness’ or ‘morality’ in the current U.S. administration. Therefore, what was required for India and other countries was setting counter measures, putting safeguards and increasing relationships with other countries outside the U.S, to mitigate any adverse impact.
Also, there was a 50% chance of the U.S. going into a recession by the end of calendar 2025 itself, if President Donald Trump “continued what he is doing currently”, he cautioned, indicating overly relying on the U.S markets will not be a wise thing for India.
“It is difficult to predict, because nobody knows what Mr. Trump will do. He has already retracted from certain measures. But if he continues what he is doing now, I see a 50% chance for a recession in the U.S. by the end of this year itself,” said Mr. Smadja, who is also the chairman of Smadja & Smadja, a strategic advisory firm based in New York.
According to him, the initial signs of a potential recession are already visible in the U.S. domestic market. “There is higher indebtedness of households, higher level of default on credit cards, another stupidity is that Trump wants companies to relocate, he wants to reindustrialise America and he wants to deport millions of migrants. But, where will he find own people to reindustrialise the country?’‘
On the trade deal which is currently being negotiated between the U.S and India, he opined, ‘‘If India has to accelerate the negotiation it would be very bad for the country. My hunch is, faster the negotiation and worse the deal for India. The U.S. seems in a tearing hurry and that’s the strategy of Trump. Hope Indian leaders know it better and take caution,’‘ Mr. Smadja anticipated.
To be honest, India was not better treated or more badly treated than any of the countries by the Trump administration. ‘‘In his [Trump’s] mind, ‘‘friends’‘ or ‘‘allies’‘ doesn’t exist. For him every single country or every single leader was an interlocutor, all in a transactional relationship, in which he would arm twist these maximum to extract the maximum. That is the reality of his administration.’‘
The recent announcement of 100% tariffs on all movies produced outside of the U.S. was another example, he said. ‘‘Imposing a 100% tariff on movies made outside of the U.S. and why on earth is this happening, impacting Indian diaspora and Bollywood? This is another example of how Trump is twisting arms with India to a breaking point,’‘ he commented.
Single window clearance
However, as a word of caution to India he said, to attract investors, India should simplify entry procedures and processes. ‘‘Unfortunately, India’s much-hyped single window clearance system is like a jungle. Nothing is easy under this system and that makes India still a complicated and a tough market to enter for global investors.’‘
Published – May 10, 2025 08:15 pm IST
