(Bloomberg) -- Billionaire Anand Mahindra, chairman of India’s largest SUV maker, can’t understand why Indian markets seem perturbed by the threat of a global tariff war.
“Small, export focused countries stand to lose. Countries with large domestic economies can easily withstand tariff threats,” Mahindra tweeted Thursday.
As President Donald Trump’s steel tariff prompts concern about retaliation and a trade war, the head of the $19 billion Mahindra Group was quick to highlight India’s fortunate position as the world’s fastest-growing major economy. And one heavily focused on domestic consumption. India is the third-biggest producer of steel, yet only 0.2 percent of the material its mills made found its way to the U.S. in January, according to data from the U.S. government and the World Steel Association.
Instead, India’s steel factories are boosting production to keep up with Prime Minister Narendra Modi’s infrastructure plans as he aims to transform aging infrastructure across the nation and create ‘Smart Cities,’ replete with affordable housing, improved sanitation and better transportation. The government wants to boost per capita steel consumption to between 130 and 140 kilograms from 65 kilograms.
India is also less likely to attract attention for its trade surplus with the U.S., which at $22.9 billion in 2017 was less than what China prints in a single month.
Despite this, concerns around a trade war helped push the benchmark S&P BSE Sensex down 2.2 percent this week. A metals index of 10 companies including Tata Steel Ltd. and JSW Steel Ltd. sank 6.9 percent, the most since 2016 on concern the local market will be flooded with supplies from surplus nations.
“India can stand tall in a trade war,” Mahindra tweeted, given its access to global technology and capital to fuel innovative startups along with its ability to import the commodities the nation lacks. “The world needs access to the fastest-growing large economy -- India,” he said.
©2018 Bloomberg L.P.
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