Revive, But Wisely: Why USA and India Must Choose Their Industrial Battles

In both the United States and India, the policy mood has shifted sharply toward economic self-reliance. In the U.S., Donald Trump has promised to bring industry back to American soil; while in India, the government champions "Atma-nirbharata" as a national mission to reduce dependence on imports. But both nations may be at risk of missing the forest for the trees.


The Overreaching US Industrial Revival

Trump’s vision of re-industrialization in the U.S. is sweeping and romantic. He speaks of reviving steel, autos, electronics, pharmaceuticals, and more—hoping to recreate a 20th-century industrial boom in the 21st century. But industrial revival isn’t just about tariffs or factory construction. It hinges on the availability of trained manpower. Decades of deindustrialization have hollowed out America’s skilled blue-collar workforce. Apprenticeships have vanished, vocational training has shrunk, and immigrant labour, once a vital part of the workforce, is now politically unwelcome. Trump's strategy risks collapsing under its own ambition.

A more pragmatic approach would focus on strategic sectors where America already has a competitive edge: oil and gas, aircraft (both military and civilian), global-scale software (including AI), luxury manufacturing, and selective internal combustion engine (ICE) vehicles. These sectors offer high-value jobs, export potential, and strategic leverage. But even these industries will require substantial investment in labour skilling/training and mobility, and —none of which can be done overnight.


India’s Blind Spot: The Export Dependence Trap

India is not chasing a re-industrialization dream but rather an import-substitution one. The policy establishment has largely equated economic sovereignty with reducing imports. While that’s important for certain critical technologies, India's true vulnerability lies in its exports.

Consider gems & jewellery and apparel—both large employers and major export earners. These sectors are heavily dependent on a single market: the United States. A downturn in U.S. demand or a shift toward protectionism could devastate entire industry clusters. Instead of only focusing on localizing inputs, India must prioritize export de-risking by expanding its market reach beyond the West. Tailoring products to emerging markets and investing in trade infrastructure in Africa, Southeast Asia, and Central Asia should be the goal.

More importantly, India must move up the value chain. The gems industry could branch into precision tooling for electronics, while the apparel industry could shift from mass-market fashion to technical and industrial textiles. The key difference here is that India needs to go from being a low-margin supplier to a strategic exporter. True Atmanirbharta isn’t about turning inward, but about gaining the power to shape and survive in global markets.


Learning from Each Other: What India and the US Can Teach Each Other

There’s an irony here: Both the U.S. and India could learn from each other. The U.S. must acknowledge its labour bottlenecks and avoid spreading itself too thin across too many sectors. India, on the other hand, needs to look beyond its borders and reduce its export fragility by diversifying its markets and industries.


Conclusion: The Need for Strategic Restraint

Industrial ambitions are tempting. But they need to be pursued with strategic restraint. Otherwise, nations risk 'building' industries without workers or exports without resilience. And, thereby, they can potentially destroy the very politicians who dreamed and drummed them up.

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