Anand Mahindra: Ease of Biz & US Tariff War

New Delhi, Aug 6 (PTI) Mahindra Group Chairman Anand Mahindra on Wednesday said India must go beyond incremental reform to radically improve ease of doing business to attract investments and seize the opportunity created by 'unintended consequences' of US President Donald Trump's tariffs.

In a post on X, he also suggested unleashing the power of tourism as a forex engine for India to shape a virtuous consequence for itself from the prevailing tariff war unleashed by the US.

He said the 'law of unintended consequences' seems to be operating stealthily in the prevailing tariff war unleashed by the US, citing examples of EU which has responded with its own strategic adjustments, and Canada which has also taken steps to dismantle its internal trade barriers between provinces.

"Both these 'unintended consequences' could become long-term positives for global growth. Shouldn't India too seize this moment to shape a virtuous consequence for itself?" he wrote.

Just as the 1991 forex reserves crisis triggered liberalization, he wondered, "Can today's global 'Manthan' over tariffs yield some 'Amrit' for us?" Suggesting "two strong steps" that India can take today, Mahindra said, the first is to "radically improve ease of doing business".

"India must go beyond incremental reform and create a genuinely effective single-window clearance system for all investment proposals," he asserted.

While states control many investment regulations, Mahindra said, "We can begin with a coalition of willing states aligning with a national single-window platform. If we demonstrate speed, simplicity, and predictability, we can make India an irresistible destination for global capital in a world seeking trusted partners." He mooted the idea to "unleash the power of tourism as a forex engine" as the second step.

"Tourism is one of the most underexploited sources of foreign exchange and employment. We need to dramatically accelerate visa processing, improve tourist facilitation, and build dedicated tourism corridors around existing hotspots, offering assured security, sanitation, and hygiene," Mahindra noted.

These corridors can serve as models of excellence, encouraging other regions to emulate and raise national standards, he added.

Suggesting a broader action agenda to build on these pillars, he called for liquidity and support for MSMEs; infrastructure investment acceleration; push for manufacturing via enhancement and expansion of the scope of PLI schemes.

Mahindra also suggested rationalisation of import duties "so that duty on manufacturing inputs are lowered and assist in improving our competitiveness".

"Let the unintended consequences we create be the most intentional and transformative ones of all," he said adding "we cannot fault others for putting their nations first. But we should be moved to make our own nation greater than ever".

Mahindra observed that as an unintended consequence of the US tariff war, "the EU may appear to have accepted the evolving global tariff regime, responding with its own strategic adjustments." Yet the friction has nudged Europe to rethink its security dependence, leading to higher defence spending in France and Germany, he noted.

"In the process, Germany has moderated its fiscal orthodoxy, which may well catalyse a resurgence in Europe's major economies. The world could gain a new engine for growth," Mahindra wrote.

Similarly, he said, "In Canada, long hampered by notorious internal trade barriers between its provinces, steps are now being taken to dismantle them, bringing the country closer to a common market and enhancing economic resilience."

Mahindra's note comes on a day when President Trump slapped an additional 25 per cent tariff, raising it to 50 per cent, on goods coming from India as a penalty for New Delhi's continued purchase of Russian oil, a move that is likely to hit sectors such as textiles, marine and leather exports hard.