Nilesh Shah, MD of Kotak Mahindra Asset Management, recently commented on the announcement by US President Donald Trump of reciprocal rates on India, China and several other countries. Taking a jibe at the announcement, Shah said that strong nations can do what they want.
He even quoted Sant Tlsidas, the creator of Ramcharitmanas, to support his point. “Samarth Ko Nahi Dosh Gosain” means that people in power or those who are strong are often not blamed for their actions, even if they make mistakes while the weakest individuals are confronted with a criticism even for minor actions.
“My two bits on Trump’s tariff saga. President Trump proves what Sant Tlsidas wrote centuries ago.” Samarth Ko Nahi Dosh Gosain “WTO is intended for weak nations. Strong nations can do what they want,” he wrote in an article on X (formerly Twitter).
Shah said that developed nations can even calculate prices as a deficit with the United States divided by exports to the United States and get away with it. “We will soon see a case study to justify this new definition,” he said.
In addition to this, the market expert also stressed that the world will respond to American prices by weakening the currency, negotiations with the United States under clause 4 of the order to mitigate their concerns, counter-trials and even lobbying in the United States to contest this order.
Impact on India and its peers
Coming to India, he said that the country had been touched much lower than most of its peers. The United States has taken 27% of reciprocal prices from India against 29% on Pakistan, 37% in Bangladesh, 36% in Thailand, 32% in Taiwan, 44% on Sri Lanka and 44% in Myanmar.
“India has been affected lower than most of its peers. It is up to us how we manage the situation. We can bring shoes and clothes of their Asian peers if we meet together,” he said. He also mentioned that India must be proactive about China pouring goods on the Indian market.
“We must be proactive about the Chinese spill. We must negotiate hard with China to create a win-win situation rather than the usual loser situation.”
Impact on the US economy and markets
Further on in his position, Shah predicted that mass rating in mass in 2025 would not have the desired results for the economy and the American markets.
He explained that the United States imposed prices like this in 1828 and in 1930, which both led to the recession / great depression. The Kotak Mahindra Asset Management MD noted that the increase in prices will result in lower growth and higher inflation.
“If the American markets are corrected, American consumption, which represents two thirds of the economy, could undergo pressure due to higher inflation and the effect of evaporating wealth. For emerging markets, it will be called stagflation, but for the United States, it will be called a difficult landing.”
