[00:00:00] Debkanya: Let's go to a reporter. On the ground,
[00:00:02] Kiran Menon: So Debbie, today we are going to be talking about the T word again. Which t though?
[00:00:10] Debkanya: there are so many keywords making headlines. Which one do you want? I mean, obvious. Guess one, Trump.
[00:00:18] Kiran Menon: That's it.
[00:00:19] Debkanya: in the news. Back in the news. Yeah. I mean,
[00:00:21] Debkanya: leave? Did he ever leave the front page? Second one, tariffs.
[00:00:26] Kiran Menon: Of course, yes.
[00:00:28] Debkanya: been
[00:00:29] Debkanya: bit.
[00:00:30] Kiran Menon: Check,
[00:00:30] Debkanya: one, trade wars.
[00:00:34] Kiran Menon: check, check, check. We are gonna be talking about Trump trade wars and tariff.
[00:00:40] Kiran Menon: Hello. I am Kiran and I am the host of Takaro Kids. And with me is,
[00:00:49] Debkanya: Debkanya, who is not as sing-songy as my co-host, Kiran. Kiran, you're in a very good mood today. You're so excited about all the tariffs that have been put on India and all the other countries by the US.
[00:01:02] Kiran Menon: yeah, I mean April 2nd was apparently called Liberation Day by Mr. Trump. Because he was liberating the US from the rest of the world and you know, everyone else taking the US for a ride.
[00:01:17] Debkanya: Mm. Yeah, that's, that's the big headline on today's episode that we are going to kind of decode and explain as best as we can. So bear with us. So what's basically happened. Is the president of the United States of America, Donald J. Trump has announced, and he's been warning us and telling us about this for a while, and it's finally happened,
[00:01:40] Debkanya: that there's gonna be a bunch of tariffs on. countries when they sell their goods and products to the us Okay? This is called exporting, right? So other countries, like for example, India, we export a lot of things to the US and when we export these things to the US, we have to pay a tariff, which means we have to pay an extra
[00:02:03] Debkanya: on whatever we sell to the us, right?
[00:02:06] Debkanya: And that tariff varies from country to country. If you look at the news, in fact. You'll see there's a picture of Trump standing with this little blackboard kind of thing where he's listed out each country and what tariff each one is going to be going to have to pay, and India has to pay 26%. Can you explain what 26% would be? What's a good way to explain that?
[00:02:29] Kiran Menon: Well, so if you sell something for a hundred rupees. To the us right? There is a tariff imposed on that. So you have to actually pay 26 rupees to the US government for that export, right? So in a sense, what will happen is when I think about selling a product, let's take a, you know, I don't know, a pen that I'm gonna sell for a hundred rupees, and now suddenly Trump has said 26 of those rupees have to go to.
[00:03:02] Kiran Menon: Him and his administration and the US government, I don't have profits anymore, so what am I going to naturally do? I'm going to price my pen higher. I'm gonna charge maybe 130 rupees for it so that those tariffs, so that 26% that I have to now pay the US government, the consumer pays that amount.
[00:03:26] Kiran Menon: So in a sense, what tariffs actually will do more often than not is actually increase the price for each product that the US economy is gonna buy, the US consumers are gonna buy. And in fact, one of the big problems is the fact that, you know, automotive US is one of the largest automotive economies in the world.
[00:03:46] Kiran Menon: You know, the most number of cars, the most number of vehicles, everything is sold in the US right? And that's gonna be pretty prohibitive because most of the automotive products in the US you know, the cars. Have a huge amount of components coming from different parts of the world, or is actually built in a different part of the world and brought to the US.
[00:04:07] Kiran Menon: So it depends on which country is exporting it to the us. The tariff will change, so it's gonna be crazy. It's gonna be really, really crazy for a while.
[00:04:16] Debkanya: Yeah, and we've, we've actually explained this in a lot of detail in one of our previous episodes, so do
[00:04:22] Debkanya: if you want to understand exactly what a tariff means and why Trump is so interested in putting all these tariffs. On different countries and how it impacts their economy. We've covered all of that. In this episode though, what we want to do is focus on India, right?
[00:04:36] Debkanya: What are going to do to our economy? What does it mean for you know, Indian industries? For example, just found out, did you know Kiran, that India is one of the biggest, I mean, one of the biggest exports from India to the US is jewelry and, you know,
[00:04:57] Kiran Menon: Yeah
[00:04:57] Debkanya: precious stones.
[00:04:59] Kiran Menon: yeah, yeah. In fact you know, pearls, precious Stones and Precious metals, they account for about $10.1 billion of exports every year to the us, right? That's a huge amount, and it's one of the largest. In fact, after that comes electronic equipment, which accounts to about $9.9 billion. And third is actually pharmaceutical products.
[00:05:22] Kiran Menon: So, you know, medicines and things like that. So companies like Dr Reddy's and Cipla and all of those guys who do a ton of exports to the US market, they account for about seven and a half billion dollars every year. So these are large amounts, right? For, for Indian businesses. And there are some
[00:05:40] Kiran Menon: sectors or some industries that Trump has waived tariffs on. In fact, for example, the the pharmaceutical sector has been exempted, right? Has been exempted from this reciprocal tariff. So, which means, you know, they can still continue to sell.
[00:05:56] Debkanya: is our reciprocal tariff?
[00:06:00] Kiran Menon: Oh, yes. Good question. We kind of bypassed that. No,
[00:06:03] Debkanya: I've heard
[00:06:05] Debkanya: the phrase discounted reciprocal tariff. What does that
[00:06:08] Kiran Menon: mean?
[00:06:09] Kiran Menon: Yeah. So with India, what happens is India basically charges any US company about 52% as a tariff for them to sell their products in India.
[00:06:24] Debkanya: Right.
[00:06:24] Kiran Menon: Right? So a US company is selling that pen. It is. It is huge. Right? So a US company is selling a pen coming into India and selling it 52 rupees out of every a hundred.
[00:06:36] Debkanya: let's be more specific. For example US iPhone from the US being sold in
[00:06:42] Kiran Menon: Yeah, if it's made in the us, but if it's made in India now, because most iPhones are now made in India. For the India market, then you bypass it. Right?
[00:06:51] Kiran Menon: That's the whole point. Each country wants companies to come in and set up their companies in that country and, you know, create factories and create jobs in their country.
[00:07:05] Kiran Menon: So India has this whole Make in India program, right? So the reason Apple also started coming to India and many of the car manufacturers that come to India, many electronics products are coming into India, is because they will manufacture in India. And they will create jobs because the more factories that open up in India, there are more jobs.
[00:07:23] Kiran Menon: The economy grows, everyone starts, you know, benefiting from it. And that's the whole point.
[00:07:29] Debkanya: much cheaper, these
[00:07:31] Kiran Menon: You do, you do, you do. But the point that the government is trying to make is we want to grow our economy. And so if you spend more over here and build over here. Everyone in India gains, right? So India actually charges, you know, up 50, 52% for US products coming into India, which is huge.
[00:07:49] Kiran Menon: So reciprocal tariff in Trump's world is basically, if you do to me, I'm going to do to you. It's a tit for tat, right? Yeah, exactly. So he has been kind enough in his perspective to say we will only charge about half of what the country charges the US. So India charges US companies 52%. Trump has said, we will only charge Indian companies 26%, right?
[00:08:20] Kiran Menon: Which is half of it. And that's kind of you know, the way he's kind of created the reciprocal tariff. So tit for tat. Tariff. And, and if you look at that board, it's a very cool image. He has this one huge board that he's holding up showing each country how much they charge the US and how much he's gonna charge them now.
[00:08:40] Kiran Menon: Right. And if you see, most of it is literally half, his reciprocal tariff is half except for Great Britain, where it's equal, I think it's 10%, at 10% for, for the UK. So, so that's a reciprocal tariff.
[00:08:55] Debkanya: Understood. Got it. And you were saying, so, you know, we export a lot of medicines, pharma,
[00:09:02] Kiran Menon: Mm-hmm.
[00:09:03] Debkanya: to the US but that is not gonna get affected, right?
[00:09:08] Kiran Menon: No, no. In fact, you know, I think Trump has a soft spot for India.
[00:09:13] Kiran Menon: he's always had a soft spot for India.
[00:09:16] Debkanya: He does call Modi, his dear, dear friend. Right. A great
[00:09:19] Kiran Menon: friend rather.
[00:09:19] Kiran Menon: Correct, correct. He said that, you know, it's a, he's a great friend of mine and that imposing reciprocal tariffs on India is a very, very, very tough decision he had to make. But, you know, if India is charging my companies, I need to charge Indian companies, which is, you know, at one, one hand, it's fair, it's fair, I guess.
[00:09:40] Kiran Menon: Yeah. But, but it also, one needs to understand that you know, the US market till now has lived on a certain cost factor. And now with all of these tariffs coming in. The actual person who's gonna pay a lot is the middle class families in the US because all the products over there will start getting more expensive.
[00:09:59] Kiran Menon: Like I explained, that a hundred rupe pen will now suddenly become 130 rupees rather than a hundred rupees. Right. So I think that's the concern.
[00:10:09] Debkanya: fact, I was reading this article about how, you know, each American household is going to have to pay some $5,000 more per year. Just, you
[00:10:19] Debkanya: all these various tariffs, things are gonna get so much more expensive. And we spoke about this, right from avocados
[00:10:24] Debkanya: cars to, you know, lots and lots of things. Thankfully not medicines from India at this point because that that particular category is exempt. But jewelry, pearls, semi-precious stones, precious stones, precious metals like gold, silver, all of these things are going to get more expensive in the US. But I'm also hearing that, you know, it's India's not the worst off, right?
[00:10:45] Debkanya: Because there are other
[00:10:46] Debkanya: China has some
[00:10:48] Kiran Menon: Ooh,
[00:10:49] Debkanya: like 52% again there, or even higher.
[00:10:53] Kiran Menon: no. I mean 34%, which is half of what China charges US companies. China charges US companies about 67%. Yeah, so I.
[00:11:03] Debkanya: previous tariffs that China also had. So the
[00:11:05] Kiran Menon: Oh, yeah, yeah, yeah, yeah, yeah, yeah, yeah. and in fact, you know, that's also interesting from an India focus perspective is that it's interesting that China has been slapped with so many high tariffs because it gives India a little bit of an advantage, you know, because products like textiles, garments like we talked about, pharmaceuticals, all of those.
[00:11:28] Kiran Menon: India will start selling more to the US now because it'll actually fundamentally become cheaper than China.
[00:11:34] Debkanya: Mm-hmm.
[00:11:34] Debkanya: Chinese
[00:11:34] Kiran Menon: products in the US will start getting expensive, but the Indian products will pro probably be cheaper in some of these categories, right? So it's interesting, it's it could change a lot of the dynamics of global.
[00:11:46] Kiran Menon: Economies and global markets. And so with India especially, I think some of it has an advantage. Yes, there there are more taxes on Indian companies for sure, but because other countries now have higher taxes, India may actually still benefit from it. We'll have to wait and watch though.
[00:12:06] Debkanya: That's the positive spin on this entire story. Basically, it means that we can you know, gain out of all these tariffs. Yes, it sounds like a lot on paper, but then that would mean that we can export a lot, many more other things because our neighbours are getting
[00:12:19] Debkanya: taxed way more. Like, for example, Sri Lanka and Bangladesh.
[00:12:23] Debkanya: Simple things like clothes, right?
[00:12:25] Debkanya: These countries manufacture clothes, and export them into the US. Now since they've been, you know, slapped with massive tariffs, India has this as an opportunity that, hey, we start manufacturing and we start exporting because, you know, we are comparatively better off. Right? So of things are gonna get shaken around in the world economy.
[00:12:44] Kiran Menon: but it's also interesting because you know, many of these countries India for example, is gonna go back and see how they can reduce tariffs on US products. So. It is literally what Trump wants is to make sure everyone has a level playing field and no one is charged extra or penalized for bringing their products to another country.
[00:13:04] Kiran Menon: So India, for example, is, is going to go back and see how they can reduce tariffs on some US products. And if that kind of happens then, you know, it'll set a trend for many other countries. And The Trump administration is really using tariffs as a way to sort of equalize the market.
[00:13:23] Kiran Menon: That is, again, the positive spin on it. You know, it is crazy what he's done. No one has done it so, so widely and so yeah, aggressively. But I guess, you know, you can see both sides of the story and figure it out and, you know, make your own decision, I guess.
[00:13:39] Debkanya: Yeah, and, and meanwhile of course, you know, like you were saying, India is continuing to have conversations with the US government. They're continuing to, there's something called
[00:13:47] Debkanya: bilateral trade agreement. Basically it just bilateral
[00:13:51] Debkanya: when two countries are involved in a conversation, trade agreement means they will decide terms and conditions on, you know. Under which they will work together and sell things to each other and buy things from each other. That's
[00:14:02] Debkanya: means. So India's trying to figure out, so like you said, you know, we will buy more weapons from the us than if,
[00:14:10] Debkanya: buy more, whatever it is from India and, you know, work out an agreement.
[00:14:14] Debkanya: So , everyone's happy.
[00:14:15] Debkanya: Those conversations are still going on. So we are gonna find out, you know, how it impacts us. And this is a, this is again, something we will so start seeing in the long term, but right now people are quite worried because the stock market has been, what is the stock market.
[00:14:29] Debkanya: Kiran, quick, quick, brief.
[00:14:32] Kiran Menon: Whoa. This is an episode on its own, Debbie. Yeah. I mean, yeah, it is. So it's where we trade in stocks of companies and what is a stock, stock is how you own a portion of the company. But anyway, let's, let's not go there. That's a different yeah. That's a complete episode. Yeah.
[00:14:51] Debkanya: Let's not go there. No. Let's put it like this. How is, how are India's businesses reacting to this? How are people feeling about these tariffs? Are they scared? Are they being more careful with
[00:15:02] Kiran Menon: their money?
[00:15:02] Kiran Menon: I think it's mixed.
[00:15:04] Kiran Menon: I think it's mixed, right? Because as I said, some industries it may be a competitive advantage over chinese competitors or other country competitors. So some of them may see it as a competitive advantage and try and, you know, take advantage of that. Some of the others may be a little bit more scared, you know, like software services, if there is more and more taxes imposed on the entire IT, IT services companies.
[00:15:27] Kiran Menon: I don't know too much about that. So we'll have to kind of go into a little bit more detail and dig a little bit deeper. But if, for example, IT services companies are charged a higher tax rate, now their prices go up and India was always, you know, the, one of the largest IT services hubs for the world.
[00:15:43] Kiran Menon: And so what does that do to the industry, right? So, so I think it, it is gonna take a while for everyone to figure out what to, what to do and what is going to happen.
[00:15:56] Debkanya: Yeah. Cool. So let's, let's wrap it up there, because I think it's a
[00:16:00] Kiran Menon: Mm-hmm. Mm-hmm.
[00:16:02] Debkanya: was a tough, tough topic for us to kind of break down. I
[00:16:05] Kiran Menon: Who was.
[00:16:06] Debkanya: of making sense. And if not, then please do write to us and tell us, you know, we didn't get that, or we want you to simplify it further and we will be happy to take your feedback on. Or if you think it was perfect, then let us know. Obviously we like hearing good things and we do hear a lot of good things from you. So thank you so much for doing that. Sending in your messages. We are at that point in the episode where we announce our quiz question for this episode and announce our winner for the previous one. So do you wanna
[00:16:35] Kiran Menon: Correct. Let's go with the quiz question. What is the quiz question for this week? Debbie?
[00:16:43] Debkanya: Okay, so it's very simple. It's, again, we are checking to see if you're paying attention. What is India's biggest export to the United States of America? We've mentioned this in the episode. Go back, listen to it. If you remember, let us know. Write to us at www.takarokids.com. our website. You can enter your answer there, or you can get somebody, an adult to help you respond on our Instagram.
[00:17:12] Kiran Menon: Yep, that is it. It's very easy. We've given you the answer and if not, just go check online. It's very easy to find out as well, or, or get your parents to check. But let's move on to the winner of last week's episode.
[00:17:28] Debkanya: Yes. Now, you know, for those of you who remember we talked about Greenland and why Greenland is such a
[00:17:34] Kiran Menon: Mm-hmm.
[00:17:35] Debkanya: nowadays, and the quiz question that we asked you was, which oceans surround Greenland the
[00:17:42] Kiran Menon: You know and, and just, just on that before you give the correct answer we had many people responding back with not just the oceans, but there are so many seas and bays around Greenland. I. It was amazing to see everyone give answers, which had like six or seven different names. We asked for the oceans and there were two, but you know, there were tons of others,
[00:18:04] Kiran Menon: so thank you so much. That was amazing. But go on. What was the answer ?
[00:18:08] Debkanya: So the answer which was very specific, the oceans that's surround Greenland are the Arctic Ocean and the North Atlantic Ocean.
[00:18:16] Debkanya: so The correct answer was sent to us by Mia. Thank you so much. You are absolutely right. The Arctic Ocean and the North Atlantic Ocean are the two oceans that surround Greenland. And for this, for you know, your effort, we are sending you a gift voucher from Takaro kids.
[00:18:33] Debkanya: Congratulations.
[00:18:35] Kiran Menon: Woohoo, congrats and until next week, keep listening and have a great week. Bye-bye.