US Tariffs Are Testing Modi’s Fiscal Frugality: Mihir Sharma

Sometime in the coming months, the impact of US tariffs will begin to be felt in India — and it will not be pretty. Jobs will be lost. Labor-intensive sectors like leather, textiles, and jewelry that face 50% duties are concentrated in politically sensitive areas, such as the giant bellwether of Uttar Pradesh or Prime Minister Narendra Modi’s own home state of Gujarat. These are sectors that the government will want to protect.

But they will not want to spend a lot of money doing so. One of the hallmarks of Modi’s administration has been fiscal sobriety. He tends to avoid ...