Tariff war risks: Uday Kotak warns India to gear up for 2-3 years of rough weather

India must brace for turbulent times ahead, cautioned Uday Kotak, Founder & Director of Kotak Mahindra Bank, during an interaction on Republic TV. Reacting to global trade tensions, including US President Donald Trump’s tariff decisions, Kotak called for a reset in national mindset and strategy.

“I would like every Indian to assume we will be in rough weather and prepare to do very well in rough weather. Men and women and strength are built not in good weather,” he said, urging the public to adopt a mindset of resilience.

Reflecting on India's post-liberalisation transformation in the 1990s, Kotak reminded how domestic manufacturers stepped up to global competition. “You remember in 1992... that same Bombay club and manufacturers... woke up and by year 2000 Indian manufacturers started competing with the best in the world.”

Kotak stressed the need for urgency and self-reliance. “India is going to be getting attacked from the global side. What are we doing? How are we shaking ourselves?” he said, calling for a “healthy paranoia” even during stable times.

He also weighed in on global power dynamics, warning that the US's overreach — bolstered by its currency, military and financial clout — could damage global trust. “Trust takes a long time to build but can be eroded very fast... the approach the US has taken may serve it in the short run but in the long run it will have a price.”

Kotak added that US actions may unintentionally benefit China. “The US in many ways is playing into China’s hands.”

As tensions mount between the US and China, Kotak emphasised that India must carve its own path. “We are still an emerging power... How do we as an emerging power do not get caught in this crossfire and find our own journey?” He warned against falling for provocations. “Donald Trump knows what India does not like... He has kept on poking that hyphenating Pakistan and India... We should not fall to his bait.”

India’s global engagement, Kotak said, must be led by self-interest, not pressure. “We should be clear that there are areas we may have to agree and there are areas we will have to take a position.”

He also highlighted the importance of understanding Trump’s personality: “The man has huge ego... Playing to his ego is an important part of the narrative.”

On trade, Kotak advocated protecting India’s domestic sectors, particularly agriculture. “We can't give in on everything on agriculture... We have our farmers... our Amul... we have our local interests.”

He suggested India could leverage economic ties with China in its US negotiations. “My view is we have to play the cards which will make the US uncomfortable.”

Kotak called for urgent action to boost domestic manufacturing. “India imports Ganeshas and Rakis... But then we have to produce cheaper here.” He backed government support for mid-sized businesses. “If necessary, the government has to give steroids for building... I would say give capital support to mid-sector management.”

Despite challenges, Kotak credited India’s recent macroeconomic stability. “One of the great things India has done in the last few years is phenomenal macroeconomic stability.”

Finally, he stressed the need for a balanced foreign policy. “We have a long border with China. We have a long troublesome border with Pakistan... We are in no camp.” He said strategic decisions — like buying oil from Russia — must be assessed purely on national interest. “You have to figure out what it costs... How much is the cash flow you'll give up for what?”