Read the full transcript of former NITI Aayog CEO Amitabh Kant in conversation with veteran journalist Siddharth Zarab on “Trump’s Tariffs A ‘Unique Opportunity’ For Reforms In India”, August 8, 2025.
India’s Response to Trump’s Policies
SIDDHARTH ZARAB: What Trump has done is a moment for reforms in India has had 1 million views and countless thousands of comments and traction. So clearly, I think that’s the best point to start this conversation on what President Trump has done and he’s doing to his own people. We leave that on the side. But what should India do in response?
AMITABH KANT: So, Siddharth, my view is that this is a unique opportunity and we should carry out very vigorous reforms in our economy. My view is that this opportunity we’ll never get again. And this is India always delivers when there is a crisis. And to my mind, this is an opportunity to really eliminate a vast number of rules, procedures, regulations which exist.
So that’s one bit on ease of doing business. We need to simplify the goods and services tax into two slabs. We need to radically improve the personal income tax, on which a lot of work has already been done. We need to bring down the statutory liquidity ratio where government banks are asked to put about 18% into government bonds, etc. Which will bring down the interest rates very sharply. And we need to push for capital expenditure to a greater extent than what we have done.
So capex spend and I think lastly, to my mind, give a massive thrust to travel and tourism because it is tariff proof. India is going to buy 1,800 planes and instead of a lot of Indians traveling abroad, we should be getting tourists from abroad because on import of tourists there is no tariff.
The Question of Retaliation
SIDDHARTH ZARAB: There are plenty of questions there, but I just want to pick up this point about 1,800 planes. One of the things that’s being discussed a lot on social media is the massive amount of Boeing planes that Indian airlines are ordering – $50 billion worth of standing orders, placed orders. Given what America is doing to India with these penal tariffs, should we retaliate in any fashion?
AMITABH KANT: So many people are talking about retaliation in terms of plane orders or in terms of digital tax, etc. I’m of the view that India should remain very cool, very calm, very collected. We still have 20 days for these tariffs to kick in. And this is we should never yield to pressure, but we should negotiate away in a very rational manner, in a sensible manner. And I think there’s plenty of time to be able to arrive at an agreement.
My view is that we should never lose our autonomy, strategic autonomy. We’ve never lost that strategic autonomy, even during the Cold War period. And India should never bend. But we should behave in a very cool, calm and collected manner, as is being done at present. And we should look at a long term perspective on this.
From G20 Success to Current Challenges
SIDDHARTH ZARAB: You have spent a lifetime in government. You also organized the G20 summit. You led that massively successful event. What went wrong from that high of India’s diplomacy at the global stage to this low of President Trump unfairly calling India a “dead economy”?
AMITABH KANT: So first of all, let me put some facts before your audience. India is anything but a dead economy. Because India is the fastest growing large economy. We are the fourth largest economy in the world. We will shortly be the third largest economy in the world.
More than anything else, India has carried out very major structural reforms in its economy. The goods and services tax, IBC, etc. We’ve also digitized our economy enormously. We’ve been building our infrastructure in a very big way, which no other country has done in terms of housing, toilets, providing electricity, connection to our citizens, water connection for our citizens, plus building about 80,000km of road. No other country has done that in recent times.
We’ve also gone green in a very big way. No other country in the world has a digital identity for its 1.5 billion people plus the highest number of fast payments that we do. We do about 45% of the real time fast payments in the world. So there’s been a huge, huge impetus to growth. So we had anything but a dead economy.
So I think to my mind, it’s not that India misread Trump, but I think Trump has misread India. And I think in the long run, the second point I want to say is that actually if you look at free trade, the biggest beneficiary of free trade has been the United States of America. It controls 26% of the global GDP. It has 48% of the market capitalization with 4% of the population. So if anyone has benefited from free trade from the existing world orders, the United States of America, it’s moved on from traditional manufacturing to a post industrial society. And therefore it’s become an innovative society which has been driving growth through research and development. But it’s been a very, very big beneficiary. All its companies have been very big.
Negotiation Strategy
SIDDHARTH ZARAB: Beneficiary of free trade and all those companies are also big beneficiaries in India. Just 24 hours ago, Sam Altman has said that the highest numbers of users of ChatGPT is in India. Yet President Trump calls India “dead economy.” I want to ask you, really, what will it take for that breakthrough to happen? You indicated that there are three weeks left. I don’t know. Is that on the basis of information or your gut feel as a long standing policymaker, what will it take? A phone call perhaps from New Delhi to Washington?
AMITABH KANT: No, I don’t think we need to get into phone calls at the highest level as yet. We need to negotiate through our negotiating teams. We need to clearly spell out that we’ll go this far and not further. We have our own strategic interests. We have our own strategic autonomy.
We should be very clear in saying that Turkey buys more oil than India. China buys more Russian oil than India. Last year, European Union has bought 297 billion euro worth of oil gas from Russia. And United States itself does trade in a vast number of critical minerals with Russia. So to impose 25% additional duty on India doesn’t make sense. It’s a part of negotiating strategy which Mr. Trump has done with many other countries and I think we should just stand firm on that.
Agriculture Sector Challenges
SIDDHARTH ZARAB: Mr. Kant, what’s your take on the agriculture sector, which is, as we learn, one of the sticking points in the negotiations? Do you believe it’s time for India to consider the latest innovations in agriculture, including GM food and perhaps at the margins, offer some concessions on products that are not made in India? Blueberries, cheese. The list is pretty long, sir.
AMITABH KANT: So I think we should do what’s in our national interest after debate and discussion. Domestically, we should not do it to cater to the panderings of the United States. If it’s in our national interest, we should do it. But if it’s not in our national interest, and the Prime Minister has gone on record to say that we will not compromise on the interest of our farmers, so we should do what is feasible and not go beyond that. But I think it’s also a huge opportunity to carry out massive domestic reforms. Massive domestic reforms, and that should give us the impetus to growth.
Regulatory Reforms
SIDDHARTH ZARAB: This is a very, very important point that you made before. In one panel, this point was made that while the license raj has gone down over the last few decades, there’s a new kind of regulatory raj that has come up in the context of all the regulatory institutions being at the central level and by the way, being peopled by former officers from your own fraternity, the IAS. Just as one example. Do you think this is one of those reforms where greater regulatory flexibility and private sector expertise needs to be brought in?
AMITABH KANT: So there are many private sector regulators also. I mean look at the Competition Commission of India. There are many people from the private sector. Many of the regulators also have been from the private sector. You’ve had in the past, Urjit Patel, Raghuram Rajan, many of them economists etc who had not been in government earlier. So the government has tried out various innovations.
As far as we’ve in NITI Aayog we had 500 people from young interns, all young interns. They had all made an entry into the government and I greatly benefited from them. So go for the best. Whoever has the clear mindset of taking India to a $35 trillion economy that requires a lot of hard work. I mean it needs India to make its GDP grow 10 times, its per capita income to grow nine times. It requires India’s manufacturing to go 16 times. Now how will that happen?
The Path to Economic Growth
SIDDHARTH ZARAB: How will that happen? Manufacturing for example, you’ve done a lot of work on that yourself.
AMITABH KANT: So you need India to grow at consistent rates of 8 to 9% per annum for a three decade period. Very few countries in the world have been able to do. Only Japan post World War II, Korea in the 70s, and China in recent times. Every other country got caught in the middle income trap. 108 countries in the middle income trap.
SIDDHARTH ZARAB: You fear that is something that we could also see?
AMITABH KANT: Well, India needs radical reforms constantly. India needs not merely radical reforms. It needs 12 states of India to grow at 10% plus. It needs the eastern part of India – UP, Bihar, Jharkhand, Chhattisgarh, Madhya Pradesh, Rajasthan – all to grow in double digits. The southern part of India and the western part of India has already grown. So you need these states to grow. You need growth with equity and you need sustained growth over a three decade period. And you need minimum 10,000 large companies in India. The base of large companies is still very small. So you need to create 10,000 large companies in India.
GST Reforms and Implementation
SIDDHARTH ZARAB: Let’s take the GST Council. Months have passed. There are proposals for rationalizing certain levies that the GST Council has imposed. For example on insurance premium, health premium. You take a policy in five years you have paid more through premiums that you have ever gotten back. No decision is taken. Look at the exclusion of certain sectors from GST. It was supposed to be a great prime example of center state cooperation. The best brains, the best secretariat supporting it. Very few things seems to be moving. We keep constantly talking about GST 2.0.
AMITABH KANT: Siddharth, one of the first things I said was when you asked me about reforms, I said the GST needs to be simplified into two slabs and made it very simple and easy.
SIDDHARTH ZARAB: I agree, sir. There are…
AMITABH KANT: I also feel that the personal income tax needs to be simplified.
SIDDHARTH ZARAB: Why is it not happening?
AMITABH KANT: I think that’s something which you will see a lot of more reforms happening. Some of these things have been spelt out in the budget and should happen much like the R&D. 20,000 crores have been provided, 10,000 crores have been provided for Deep Tech Fund. So I think some things will be in the offing in due course because there are clear budgetary announcements to that regard.
SIDDHARTH ZARAB: Is there a slowdown on reforms that you see has happened in the recent past?
AMITABH KANT: I won’t say slow down, but I think there’s a need for every ministry and every secretary to the government of India to push for reforms to confront the challenge of tariff. Right now, everyone has to push for every single little reform. And that is critical. And the prime minister has talked about it and saying that this should really be a period of reforms.
Brand India and Tourism
SIDDHARTH ZARAB: You spoke about tourism as one of our advantages. I don’t know how many here recall your stellar role in crafting Brand India. Brand Bharat, I wonder if today you were asked and given that assignment again, what brand would you come up with?
AMITABH KANT: I think we should stick with “Incredible India.” There’s nothing better than “Incredible India.”
SIDDHARTH ZARAB: Not “Incredible Bharat,” no?
AMITABH KANT: No. “Incredible India” is something which has stuck into the minds because India is a very large country. It’s a very…
SIDDHARTH ZARAB: A round of applause for the person who did that.
AMITABH KANT: So we are bigger than 24 countries of Europe. You have a lot of complexity. But there’s no better word to capture the complexity of India than “Incredible India.” We should just sustain that in a very vigorous manner. You should never change the brand line for India. There’s nothing better which captures the ethos, the ambience, the glamour of India than “Incredible India.”
India’s Demographic Advantage and Infrastructure Achievements
SIDDHARTH ZARAB: Well, a timeless brand. Thank you once again for giving that to our country. I want to take a couple of points. You’ve seen the fruit and benefits of globalization that India got in your government service. It’s clear you and so many other experts are saying we are at a pivotal moment. We have one session which said “the 1991 moment.” Once again, in a world where globalization is fracturing, what do you think our comparative advantages will be which will take us down this path of Viksit Bharat?
AMITABH KANT: See, Siddharth, we must understand that India is a very young country. Nobody else has a favorable demographics than India has. United States is aging. Europe is aging. Japan is aging. India is very young. It’s younger than China.
Number one, there is no other country in the world today which is actually doing about close to 30km of road and about 12km of railway line every day. There’s no other country which has been able to do 31x of green solar in the last seven years. There’s no other country in the world which does 50% of the real time fast payments on mobile. No other country in the world which does this.
And therefore I strongly believe that this is irrespective of tariffs. This is not merely India’s decade, but this is India’s century.
The Need for State-Level Reforms
SIDDHARTH ZARAB: India at 100, when the Republic turns 100 and you told us this is India’s century. I’m going to ask you who needs to reform more, the center or the states?
AMITABH KANT: I think the states. Now, the center has done a lot of reforms, but now is really the opportunity for states to push for reform in a very big way. And the mindset at the state level is that India will grow only if there’s free enterprise. It’s not the states which, it’s not the governments which drive growth. Growth is driven by the private sector.
And therefore you have to scrap a number of rules, regulation, procedures at the state level. The center has done its bit. The states have to become champions of growth and push for private sector growth. It’s only when private sector grows, India will grow.
SIDDHARTH ZARAB: When we talk to private sector executives, off record, they say that a lot of rent seeking still happens and that is facilitated by the bureaucracy and captured by the political class. You agree with this?
AMITABH KANT: Well, I think not at the center, but at the state. A lot of reforms need to be done. And that’s simply because over the years we’ve built up a lot of rules, regulation which needs to be scrapped. Allow everyone to do it in a digital manner. Every transaction should be digital like we do with payments. Every single access to government should be digital.
There should be no form. There should be no law which is more than, to my mind, more than two pages. There should be no form which should be more than half a page. And it should all be digital. And everybody should have access to government only digitally. Why should there be rent seeking?
And this needs to be pushed at the state level. The center’s done a lot in these terms and that’s why the reforms at the center is not adequate. You need 12 champion states to push this. If 12 states of India grow at 10%, India automatically grows at 9%.
The 12 Champion States Strategy
SIDDHARTH ZARAB: Who are those 12 states in your mind? Who will possibly become the 12 champion states?
AMITABH KANT: In my view, you already have had the southern states growing. You already have had the western part of India growing. It’s now because the eastern part of India has grown at low base levels. The opportunity for them to grow at high rates is very high.
So you need UP, Bihar, Madhya Pradesh, Rajasthan, Chhattisgarh, Jharkhand to emerge as the future champions of India. And these are all mineral rich states. Odisha for instance, all of them are hugely mineral rich states. There’s no rationale at all why they shouldn’t be growing at 9 to 10% per annum.
And if the eastern part of India grows, then you are growing with equity. Because these are 55% of India’s population is in the eastern part of India. They need to become the real champions of India for the future.
State-Level Branding and Tourism
SIDDHARTH ZARAB: As we wind down this conversation, I want to bring out your old hat of brand guru once again. My colleague Alok spoke about Kerala and he reminded this entire audience of your involvement there. But from Kashmir to Kanyakumari, should all our states have a state level brand? Also something like an “Incredible India”? And if so, what do you think that should be?
AMITABH KANT: Well, every state of India must have its own brand because we must understand that India is a very large country. We are bigger than 24 countries of Europe. And every state must have its brand. And every state must push for tourism because tourism is the biggest multiplier of job creation. And tourism should be seen as a job creator. So every state must create its own brand. But “Incredible India” must be the mother brand.
The Critical Reform for $30 Trillion Economy
SIDDHARTH ZARAB: Okay, last 30 seconds and one quick question. That one reform before we set up this conversation. You told me about $30 trillion and the journey there, you captured most of it. But in closing, I ask you that one reform that you think needed to be done yesterday on the path to a Viksit Bharat, a $30 trillion economy.
AMITABH KANT: Well, I think to my mind simplification of GST is very critical. It’ll give a huge impetus. There is also a need for eliminating a lot of rules, regulation procedure. Even for a startup, it’s taking a lot of time for them to get registered. So eliminating lot of rules, regulation, procedures at the state level is very, very critical. States must be the key drivers of growth.
SIDDHARTH ZARAB: Great words there. No rules, no policies, no laws more than two pages. I’ll take that as the key message. But, Mr. Kant, thank you very much for your time with us. Some of the ideas that you spoke about are captured and I’m very proud to say in this latest edition of BT India at 100. And we’ll take inspiration from many of the other ideas that you gave us. Once again, thank you very much for your time.
AMITABH KANT: Thank you. Thank you very much.
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