Kotak Mahindra Bank’s Uday Kotak Warns Against India’s Protectionism, Calls For Competitive Industry

Uday Kotak, Founder & Director at Kotak Mahindra Bank, discussed key concerns surrounding trade policies, and capital flows on the sidelines of the 3-day Kotak Institutional Equities' Investment Conference.

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Uday Kotak calls for a competitive industry

The banker also shared the need for structural reforms to improve India’s global standing in the economic landscape. Kotak said that India currently imposes around 10% tariffs on American goods, whereas the US levies only 3% on Indian products.

“As tariffs hit other producing nations, they will have surplus capacity to sell to the rest of the world at a much cheaper rate,” said the report quoting Uday Kotak. “If any of the commodities from surplus production countries are 30-40% cheaper than India, what should India’s strategy be?”

He stressed India’s need to focus on competitiveness rather than falling back on protectionist measures.

Cautioning against excessive protectionism, the Kotak boss argued that India must embrace competition instead of trying to protect domestic industries behind high tariffs.

However, he agreed that protection is necessary for emerging industries to some extent. But he pointed out that excessive barriers could hold back innovation, reduce productivity, and limit the nation’s ability to integrate into global supply chains.

Instead of relying on protective barriers, the renowned banker believes the focus should be on making Indian industries more competitive through skill development, productivity enhancements, and improved infrastructure.

He said the new world will give limited options to run large current account deficits, and so, India will have to improve productivity, avoid excessive protectionism and surge manufacturing as a percentage of GDP. [Source: Mint]

The entrepreneur also mentioned that artificial intelligence (AI) will reshape industries, including education and financial sectors.

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