Jeffrey Sachs pulls no punches: with 50% U.S. tariffs now in effect, he urges India to “go with China, join the RCEP” as the linchpin of a smarter growth strategy. As Trump’s protectionism risks stunting American competitiveness, Sachs sees an opening for India to deepen its engagement with East Asia—and reduce reliance on an unstable Washington
The erudite economist’s blunt prescription for India comes at a moment of acute economic strain and geopolitical flux. With Trump’s 50% tariffs now in effect on Indian goods, Sachs warns that clinging to an unpredictable U.S. could undermine India’s growth trajectory, although S&P opines otherwise.
Instead, he urges New Delhi to place its bets on Asia—specifically by joining the Regional Comprehensive Economic Partnership (RCEP)—and to accelerate integration into the world’s most dynamic economic bloc.
India has faced this question before. In 2019, wary of exposing domestic producers to a flood of cheap Chinese imports and concerned about insufficient safeguards, New Delhi walked away from RCEP negotiations. The decision was rooted in political prudence and an instinct for self-preservation.
But in the years since, the trade landscape has shifted dramatically. RCEP has matured into the world’s largest trading bloc, linking 15 countries—including China, Japan, South Korea, ASEAN, Australia, and New Zealand—that together represent nearly 30% of global GDP and population. Analysts forecast the pact could add $209 billion annually to the global economy by 2030, and India’s absence now looks increasingly like a missed opportunity.
Sachs believes that opportunity is still open. “India could easily reach 7% GDP growth if it deepens economic engagement with East Asia,” he has said, framing RCEP not merely as a trade deal but as a growth multiplier. For India, accession would mean more than tariff concessions—it would be an entry into resilient supply chains that stretch from Shenzhen to Seoul, and access to technology-driven markets where demand is rising as fast as incomes.
The timing of this debate is critical. President Trump’s tariffs, rolled out in successive waves since July, have upended India’s export prospects. What began as a 25% levy has now doubled, affecting more than two-thirds of India’s shipments to the U.S. Key sectors—textiles, pharmaceuticals, seafood, machinery—stand to lose heavily. Some estimates suggest export volumes could fall by as much as 40% in certain categories. The irony, Sachs argues, is that these measures will weaken the U.S. as much as India, eroding competitiveness and accelerating America’s retreat from global supply chains.
India has not stood idle. In response, the government has launched a ₹25,000 crore Export Promotion Mission, designed to help manufacturers reposition themselves in global markets and expand outreach to 40 countries, including Canada, Germany, Japan, and the UK. The goal is to recast India as a reliable, innovative supplier at a time when supply chains are being re-drawn. But diversification on its own may not be enough without a structural shift toward deeper regional integration.
This is where Sachs’ advice resonates most. For years, Indian policymakers have talked of a “Look East, Act East” policy. Joining RCEP would operationalise that vision, embedding India in Asia’s trade and investment networks while balancing ties with the West. It would also align with India’s growing role in BRICS, where the presidency in 2026 offers an opportunity to set the agenda on trade, investment, and global governance.
The geopolitical backdrop makes the calculus even more complex. Trump’s tariffs are not just economic—they are political weapons. Analysts like Brahma Chellaney warn they are aimed at coercing India into a one-sided deal, with Washington dictating terms. Yet the unintended consequence is to push India closer to Beijing and Moscow. Sachs even envisages a scenario where India and China set aside border disputes, expand trade and investment flows, and perhaps even see Beijing back India’s claim to a permanent seat at the UN Security Council. Such a realignment may sound unlikely, but economic logic, he argues, often precedes political shifts.
Skeptics in India rightly worry about overexposure to Chinese imports and the potential hollowing out of local industries. These concerns cannot be dismissed. But Sachs counters that with strong domestic policies—industrial upgrading, R&D investment, and targeted protection where necessary—India can enter RCEP from a position of strength rather than vulnerability. What matters most, he suggests, is to avoid strategic isolation at a time when supply chains are consolidating without India.
The stakes are far larger than bilateral trade numbers. India’s long-term growth story is built on openness, entrepreneurship, and global integration. The U.S. has been a vital partner, but America’s inward turn threatens to limit opportunities. Asia, meanwhile, is powering ahead, and Africa looms as the next frontier for investment and markets. India must decide whether to cling to a fraying transatlantic model or embrace a multipolar trade architecture where it can shape rules, not merely follow them.
As India weighs its options, one truth stands out: there is no room for nostalgia or sentiment in global trade. The future belongs to agile economies that seize opportunities amid turbulence. Sachs’ call to go with China may sound provocative, but at its core lies a pragmatic recognition that India’s growth cannot be tethered to a single, increasingly unstable partner. To secure its economic destiny, New Delhi must act decisively, balance its partnerships, and anchor itself where the growth is.
