Uday Kotak says Donald Trump’s tariffs have ‘woken Indians up’! Banking billionaire urges support from government; ‘great opportunity to pivot..’
Uday Kotak, the billionaire Indian banking figure, has urged Prime Minister Narendra Modi’s government to enhance fiscal assistance for small and medium enterprises, highlighting concerns about the impact of Donald Trump administration’s tariffs on the Indian economy.The founder of Kotak Mahindra Bank, which ranks as India’s third-largest private bank, told Financial Times that the tariff measures implemented by Trump have highlighted the economic vulnerabilities facing India, and have ‘woken Indians up’.“We must think about this as an opportunity for us to get out of our cruise mindset and from a comfort mindset to ‘we are at risk’,” he said.The US administration has recently added a 25% additional tariff on Indian imports, supplementing the existing 25% “reciprocal” tariffs.Also Read | ‘If Indian goods cannot go to US, they can head to…’: Russia slams ‘unjustified’ Trump sanctions on oil; Putin to meet PM Modi in India this yearAccording to an ET report, Kotak emphasised that the Indian government needs to provide “direct fiscal support” to enhance small businesses in manufacturing, research, and technology sectors. “Once you give that capital support, private equity, entrepreneurs’ equity [and] risk capital will come additionally,” he explained to FT, the report said.“The uncertainty of Trump’s tariff regime has created a sense of urgency for transforming India,” he said. “It is a great opportunity to pivot.”India’s macroeconomic foundations remain robust, according to his assessment. “India’s macroeconomic situation is very comfortable. Our fiscal deficit is under control, our current account is under control, you’ve got macroeconomic stability.”He urged policymakers and industry leaders to harness the trade disruption as an opportunity to boost efficiency, quality and establish globally recognised brands. He highlighted manufacturing’s significance whilst cautioning against an excessive focus on domestic markets alone.Also Read | ‘They are just profiteering…’: Trump administration fires fresh salvo on India for Russia crude trade; ‘…made $16 billion in excess profits’Given India’s per capita GDP stands at $2,700, significantly lower than China’s $13,300 and America’s approximately $89,000, he contended that maintaining status quo is not an option. “At the current ‘cruise’ level, we’ll keep on improving our position, but is it fast enough for us to get past the middle-income trap? I think there’s a gap,” Kotak said.The call for governmental action is supported by others. Anand Mahindra, who chairs the Mahindra Group, recently advocated for increased SME liquidity, along with infrastructure investments and manufacturing incentives.Additionally, RPG Enterprises’ chairman Harsh Goenka proposed that New Delhi should establish a fund to assist exporters in exploring new markets and draw manufacturers who are moving away from China.
