Current Affairs

The Dangerous Dogma: Why India Is Finally Moving Beyond the ‘Guessing Game’ in Reading Education

A Child’s Silent Struggle

I watched an eight-year-old boy “read” a page of poetry from his Hindi textbook. He spoke fluently, eyes moving across the page, finger tracking the line. Taking the book from him, I opened a page randomly and asked him to read. The child was silent. He had not been reading at all but had memorized the poem and was performing it using the picture on the page as a cue. He could barely read from the random page.

This observation, shared by Anurag Behar, CEO of the Azim Premji Foundation, captures a crisis that has silently shaped the educational outcomes of millions of Indian children. It is the story of a well-intentioned educational dogma that traveled from American universities to Indian classrooms, with devastating consequences for the most vulnerable learners. The dogma is known as the “whole language” approach to reading instruction—the idea that children learn to read by guessing words from context and pictures, rather than by systematically decoding the relationship between letters and sounds [citation:original].

The Intellectual Origins: The ‘Psycholinguistic Guessing Game’

The whole language approach emerged in the late 1960s, associated with American scholars Kenneth Goodman and Frank Smith. Its intellectual core rested on a seductive analogy: children learn to speak naturally, without formal instruction, simply by being immersed in meaningful talk. Therefore, reading must be learnt the same way—by immersion in meaningful, engaging text [citation:original].

Goodman famously described reading as a “psycholinguistic guessing game”: the skilled reader does not laboriously decode letters but samples the text, predicts, and constructs meaning from context [citation:original]. From this followed a clear pedagogical prescription: surround children with rich stories and let them guess unfamiliar words from pictures and context. Do not drill them with the dull mechanics of letters and sounds, because that kills both meaning and the love of reading [citation:original].

As Behar acknowledges, much of this is true. Children do need meaningful and engaging text. Mindless drilling can indeed kill the love of reading before it is born. The purpose of reading is understanding. But the fatal move was the slide from a partial theory and description to a prescription of how reading must be taught to the exclusion of all other considerations—specifically that the systematic and explicit teaching of the code connecting sounds to script was unnecessary, even harmful [citation:original].

The Science That Refuted the Dogma

On this point, the science turned out crystal clear. Decades of research in education, cognitive psychology, and neuroscience showed that skilled text readers do not guess from context—they decode rapidly and unconsciously. It is precisely this automatic decoding that frees the mind to process meaning. Guessing from context and pictures is not what good readers do, but what poor readers are forced to do [citation:original].

The research literature on reading acquisition has consistently demonstrated that systematic phonics instruction—teaching children the relationship between letters and sounds—is essential for developing proficient readers. Studies in India using a quasi-experimental design found that children involved in phonics-aligned programmes significantly outperformed those in control groups in reading and spelling attainment . Jeanne Chall’s seminal 1967 work, Learning to Read: The Great Debate, found that an early code emphasis produced better word recognition outcomes in the early grades and helped children read with better comprehension up to fourth grade .

The analogy at the heart of the whole language theory—reading is like speaking—was simply false. Speech is natural to us, but script is a human invention a few thousand years old; the brain must be explicitly taught to crack its code [citation:original].

The American Experiment: California’s Collapse

The United States ran this experiment at scale and paid for it. California adopted whole language in 1987. Within years, its scores on reading collapsed to nearly the bottom of the country. The so-called “reading wars” in the US raged for a generation. The National Reading Panel, after reviewing the accumulated evidence, concluded in 2000 that systematic phonics instruction was essential [citation:original].

Yet the whole language dogma survived under a new name—”balanced literacy”—and its guessing strategies persisted in classrooms for two more decades. Eventually, the most influential whole-language advocates publicly conceded new findings, and schools in the US abandoned it. Two generations of children in American public schools, disproportionately from poor communities, bore the cost of an attractive abstraction turned dogma [citation:original].

In the UK, the impact of whole language and look-and-say methods has been equally troubling. Research has shown that the approach caused damage to many adults who learned to read through these methods in the 1980s and 1990s. According to the National Foundation for Educational Research, 21% of adults in the UK in 2023 report never reading books, and an estimated 8.5 million working-age adults in England have low proficiency in literacy, numeracy, or both .

How the Dogma Traveled to India

Why should this concern India? Because the idea traveled. This view of early literacy—suspicious of the alphabet chart and of anything that smells of “mechanical decoding”—acquired the aura of settled progressive wisdom, affecting teacher education and curriculum [citation:original].

The irony, as Behar points out, is that Indian scripts are far better suited to explicit code teaching than English, whose spelling is notoriously treacherous. The akshara (syllable)-based scripts of most Indian languages are largely transparent—what is written is what is said. A child systematically taught the aksharas and their combinations holds the key to nearly every word in the language. To withhold that key in the name of protecting meaning is not progressive but regressive [citation:original].

The Handbook of Literacy in Akshara Orthography examines the unique characteristics of these writing systems and how they may affect literacy development . The akshara scripts, used by more than a billion people, have a phonological structure that makes them highly suited to systematic, explicit instruction .

Yet, as research from the Tata Institute of Social Sciences notes, many teachers in India still rely on strategies that do not adequately forge the link between symbol and sound. One common but inadequate strategy involves the teacher writing symbols on the board, reading them aloud, and asking children to repeat—without sufficient cognitive engagement to make the connection stick .

The Unequal Impact: A Story of Two Children

As with many educational failures, the effects of this dogma are unevenly distributed [citation:original]. The child in a book-filled home, read aloud to every night, will likely also learn the reading code from the attention showered by adults. The first- or second-generation learner, for whom school is the only encounter with written language while the parent does manual labour, is unlikely to learn that code [citation:original].

This disparity is a matter of fundamental justice. As Behar and others at the Azim Premji Foundation have documented, “A massive proportion of our children do not learn basic reading and writing, and mathematics, or do so very inadequately” . Children living in poverty “have less, get less, and experience a tougher life,” and the lack of resources and attention at home “can only be compensated by enhanced attention at school” .

Research from the UK Parliament’s Education Committee has similarly highlighted how the whole language approach “would have caused damage” to children who did not receive the building blocks needed to become good readers, creating a “cycle where reading becomes a chore widening the attainment gap for disadvantaged children” .

India’s Course Correction: NIPUN Bharat and the New Approach

Fortunately for India, the direction has been changing over the past few years, with a clear policy and curriculum effort aimed at teaching the code explicitly, systematically, and early—without abandoning the idea that meaning matters [citation:original].

The National Education Policy (NEP) 2020 recognizes that the ability to read, write, and perform basic operations with numbers is “a necessary foundation and an indispensable prerequisite for all future schooling and lifelong learning.” The Policy reiterates that “the rest of the policy will become irrelevant for students if the basic learning requirements at the foundational level are not achieved” .

In response, the government launched the NIPUN Bharat Mission (National Initiative for Proficiency in Reading with Understanding and Numeracy) in July 2021. The mission aims to ensure that every child achieves foundational literacy and numeracy by the end of Grade 3 . It covers five years of the education continuum, including three years of preschool and grades 1 and 2 .

Key elements of the NIPUN Bharat implementation include phonics-based reading, storytelling, interactive activities, practical exercises, and—crucially—”developing and distributing high-quality learning materials” . The mission also emphasizes teacher training, assessment and monitoring, remedial support, and community engagement .

The National Curriculum Framework for the Foundational Stage (NCF-FS), launched in October 2022, addresses all domains of development with a play-based pedagogical approach. It emphasizes the importance of play—free, guided, or structured—alongside conversations, stories, music, movement, arts, craft, toys, and games as methods to engage children .

As Behar notes, this is neither a compromise between doctrines, nor a new dogma, but what science has discovered and how good teachers have always taught [citation:original]. Learning letters as codes for sounds is the means, while understanding meaning is the end.

What the Shift Means for Indian Classrooms

The shift from whole language to systematic phonics instruction in India represents more than just a policy change. It represents a recognition that:

1. The Code Must Be Taught Explicitly: Children must be taught the relationship between letters and sounds systematically and early [citation:original]. This does not mean drill to the exclusion of meaning, but it does mean that the decoding skill must be developed with precision.

2. The Script Matters: India’s akshara-based scripts are highly transparent and well-suited to explicit code teaching [citation:original]. This advantage must be leveraged rather than ignored.

3. Play and Engagement Remain Central: As NEP 2020 and the NCF-FS emphasize, learning must be joyful, integrated, and engaging . The goal is not to return to mindless drill but to integrate systematic instruction with meaning-making activities.

4. Equity Requires Explicit Instruction: The children who suffer most from the guessing-game approach are those who lack home literacy environments [citation:original]. Explicit code teaching is a matter of educational justice.

5. Teacher Training Is Essential: The success of the shift depends on teachers who understand both the science of reading and the art of engaging young learners .

Conclusion: The Unfinished Business of Literacy

The story of whole language in India is a cautionary tale about the dangers of attractive abstractions when they are elevated to dogma. It is also a story of hope. India is changing course—not by swinging from one extreme to another, but by embracing what science has revealed about how children learn to read.

This shift matters not just for test scores but for lives. Reading is the gateway to all other learning. A child who cannot read by Grade 3 is, as NEP 2020 recognizes, unlikely to succeed in the rest of schooling. For the millions of children who come to school as first- or second-generation learners, the ability to decode is the difference between a life of opportunity and a life of limitation.

Learning letters as codes for sounds is the means; understanding meaning is the end. The two must not be separated, but they must also not be confused. The science is clear, the policy is changing, and the work of implementation has begun.

Questions and Answers

Q1: What is the “whole language” approach to reading instruction, and why did it become popular?

The whole language approach, associated with American scholars Kenneth Goodman and Frank Smith from the late 1960s, is based on the idea that children learn to read the same way they learn to speak—by immersion in meaningful, engaging text. Goodman famously described reading as a “psycholinguistic guessing game,” arguing that skilled readers do not laboriously decode letters but sample text, predict, and construct meaning from context [citation:original]. The approach gained popularity because it emphasized engagement, meaning, and a love of reading, in contrast to what was seen as dull, mechanical drilling in phonics. It had the “aura of settled progressive wisdom” and influenced teacher education and curriculum in many countries, including India [citation:original].

Q2: What does the scientific evidence say about how children learn to read?

Decades of research in education, cognitive psychology, and neuroscience have shown that skilled readers do not guess from context—they decode rapidly and unconsciously. It is precisely this automatic decoding that frees the mind to process meaning. Guessing from context and pictures is what poor readers are forced to do [citation:original]. The National Reading Panel concluded in 2000 that systematic phonics instruction was essential [citation:original]. Studies from the UK and India have consistently shown that children who receive systematic phonics instruction significantly outperform those who do not . The research established that whole language classrooms were, in effect, “training children in the habits of struggling readers” [citation:original].

Q3: Why is the whole language approach particularly damaging for disadvantaged children?

The effects of the whole language dogma are unevenly distributed. A child in a book-filled home, read aloud to every night, will likely also learn the reading code from the attention showered by adults. However, the first- or second-generation learner, for whom school is the only encounter with written language while the parent does manual labour, is unlikely to learn that code through guessing and immersion alone [citation:original]. Research from the UK has shown that the whole language approach created a “cycle where reading becomes a chore widening the attainment gap for disadvantaged children” . Children living in poverty have less, get less, and experience a tougher life, and the lack of resources at home “can only be compensated by enhanced attention at school” .

Q4: What makes Indian scripts particularly suited to systematic phonics instruction?

Indian scripts—such as Devanagari, Tamil, Telugu, Kannada, and Bengali—are akshara-based and largely transparent, meaning there is a consistent relationship between what is written and what is said [citation:original]. As Behar notes, “A child systematically taught the aksharas and their combinations holds the key to nearly every word in the language” [citation:original]. This contrasts with English, whose spelling is notoriously inconsistent. Research on literacy in akshara orthographies has explored how the phonological and orthographic characteristics of these scripts affect literacy development . The transparency of Indian scripts makes them highly conducive to explicit, systematic decoding instruction.

Q5: What is India doing to change its approach to early reading instruction?

India has been changing direction with clear policy and curriculum efforts over the past few years. The National Education Policy (NEP) 2020 recognizes foundational literacy as “an indispensable prerequisite for all future schooling” . The NIPUN Bharat Mission, launched in July 2021, aims to ensure every child achieves foundational literacy and numeracy by Grade 3 . Its elements include phonics-based reading, teacher training, assessment, remedial support, and community engagement . The National Curriculum Framework for the Foundational Stage (NCF-FS), launched in October 2022, recommends play-based pedagogical approaches with conversations, stories, music, and arts . The goal is to teach the code explicitly, systematically, and early without abandoning the idea that meaning matters—”neither a compromise between doctrines, nor a new dogma, but what science has discovered and how good teachers have always taught” [citation:original].

How to Surf Trade Waves Amid Rough or Calm Seas: India’s Strategic Tightrope

A World Turned Upside Down

Trade cynicism has become hard to escape. In a world where the United States cites an anti-discrimination law to slap new tariffs on Canada, even as its leader hints at it being payback for unsolicited deliveries of wildfire smoke, the global trading system has descended into a parody of itself . As US trade policy turns into performance art, the World Trade Organization (WTO) watches its salience recede.

Yet, as a recent WTO policy review of India reminds us, we have good reason to stay engaged with this multilateral setter of rules. The review, conducted on July 21-23, 2026, captures a critical tension: India must balance its self-reliance instincts with the openness required to achieve its Viksit Bharat goal of becoming a developed nation by 2047 . The path to that future requires sustaining 8% annual GDP growth and raising India’s share of global merchandise exports from under 2% to 10% by 2047 . Trade has been assigned a starring role in this transformation.

The review does not explicitly speak of any tension between trade principles and realistic prospects, but the subtext is unmistakable. India’s tariff walls have been rising even as its stated intent points toward deeper global integration. Navigating this paradox—surfing the trade waves regardless of whether the seas are rough or calm—demands strategic flexibility, pragmatism, and a determined resistance to cynicism .

The Tariff Maze: India’s Rising MFN Wall

The WTO Secretariat’s report, prepared for India’s eighth Trade Policy Review, highlights a fundamental reality: India’s policy framework continues to rely on relatively high tariffs, import and export controls, state trading enterprises, and extensive budgetary support programs .

The headline figure is telling. India’s simple average applied Most-Favoured Nation (MFN) tariff rate rose to 15.8% in 2025-26, up from 14.3% in 2020-21—and significantly higher than the 13% recorded back in 2014-15 . This is not a blip; it’s a three-dot uptrend.

MFN rates are the baseline tariffs that WTO members must apply to imports from all other members, with carve-outs permitted only under specific trade agreements. As such, they serve as a critical gauge of a country’s underlying trade restrictiveness. India’s rise is notable, especially when compared to its peers. As the Global Trade Research Initiative (GTRI) notes, India’s trade-weighted MFN tariff is approximately 12.6%, while average MFN tariffs in Singapore are near zero and below 4% in Japan, Australia, Malaysia, and the UAE .

The Composition of India’s Tariffs

The complexity runs deeper than a single number. India’s applied MFN tariffs consist of:

• Basic Customs Duty (BCD): The core import duty.

• Additional levies: Including the Agriculture Infrastructure and Development Cess (AIDC), Health Cess, and Social Welfare Surcharge (SWS) .

Interestingly, the BCD component alone actually decreased to 13.6% in 2025-26 from 14.3% in 2020-21 . The increase in the overall MFN rate is therefore driven by these additional levies—a nuance that suggests India is using layered tariff structures to manage fiscal and policy objectives.

The Sectoral Puzzle

India’s tariff regime is far from uniform. Agricultural products (WTO definition) face substantially higher tariffs, averaging 32.8%, compared to 11.1% for non-agricultural goods . The highest BCD import duties are levied on:

• Coffee, tea, and spices: 55.9% (primarily tea)

• Sugar: 47%

• Beverages: 44% 

Tariffs above 100% apply to just 0.7% of tariff lines, primarily affecting alcoholic beverages, tea, nuts, and beet and cane sugar. Meanwhile, duty-free lines account for barely over 3% of the total tariff lines .

The WTO report notes that 77% of all tariff lines are clustered around four main rates—7.5%, 10%, 20%, and 30%—creating an intricate but somewhat predictable pattern of protection . This “maze of rates,” as one commentator put it, is a legacy of India’s pre-1991 closed economy .

The Self-Reliance Paradox: Aatmanirbhar Bharat vs. Global Integration

The rising MFN trend must be viewed in the context of India’s post-COVID re-adoption of self-reliance (Aatmanirbhar Bharat) . The government has consistently maintained that this is not about turning inward, and its word has broadly been borne out by an outward thrust that extends beyond a policy effort to join global value chains .

Yet, the WTO’s report strikes a cautionary note. It flags the “balance between self-reliance and openness” as a key determinant of India’s future growth and resilience . The report suggests that while self-reliance can protect domestic industries, excessive reliance on trade-restrictive measures could undermine competitiveness, raise input costs, and ultimately hurt the very industries they are meant to protect.

The Inverted Duty Structure Problem

The GTRI has raised a critical concern about the interaction between India’s FTAs and its MFN tariff structure. India has 19 active FTAs and has intensified engagement since 2021, signing or concluding eight major agreements . However, these agreements have made the inverted duty structure harder to fix .

In many cases, finished goods enter India duty-free under FTAs from partners such as ASEAN, Japan, South Korea, the UAE, and Australia. But Indian manufacturers often pay high duties on imported inputs—especially those sourced from non-FTA countries. For example, steel and aluminum attract MFN duties of 7.5-10%, but machinery and industrial equipment made from these materials can enter India duty-free under several FTAs . This creates a scenario where Indian manufacturers face higher input costs while competing with tariff-free imported finished products.

This is not just a technical issue. It has real consequences for India’s manufacturing competitiveness and its ability to attract investment in higher-value segments of supply chains.

The Investment and Competitiveness Challenge

The WTO’s review is not merely a critique—it is a roadmap. The report recommends that India focus on reforms to improve the business environment, boost productivity, and reduce dependence on trade-restrictive measures to support more efficient resource allocation and competitiveness .

Key Structural Gaps

The report identifies several structural challenges that India must address to sustain strong economic performance and achieve the Viksit Bharat vision :

1. High trade costs: Indian goods remain less competitive due to logistics inefficiencies and procedural barriers.

2. Regulatory complexity: Compliance burdens and cumbersome regulations increase the cost of doing business.

3. Infrastructure gaps: Inadequate logistics and supply chain infrastructure limit integration with global value chains.

4. Limited global integration: Despite progress, India remains relatively insulated from global markets in key sectors .

Building on Reforms

The WTO acknowledged that India has made significant progress in areas such as financial inclusion, trade facilitation through digitalization and customs modernization, and ongoing liberalization of FDI regimes . The Jan Vishwas (Amendment of Provisions) Acts have helped promote ease of doing business.

However, the report argues that building on these administrative and procedural reforms will be essential to reduce reliance on trade-restrictive measures and attract more foreign investment .

India’s Counter-Narrative: The Challenge of Non-Tariff Barriers

India’s government, in its own report prepared for the Trade Policy Review, has not remained silent. New Delhi has highlighted that rising geopolitical tensions and non-tariff measures by some trading partners—including complex standards, conformity assessment procedures, and regulatory requirements—are constraining its market access .

India argues that these non-tariff measures often have a greater impact on trade than tariffs and increase costs for exporters. The government stressed that improving global market access requires all countries to ensure transparent, predictable, and fair trade rules . India has also pointed to external challenges including global supply chain disruptions arising from geopolitical tensions, climate-related events, and export controls by some countries that have “adversely affected the availability and cost of critical inputs” .

This is a legitimate concern. As India pursues its Viksit Bharat vision amid complex digital, green, and demographic transitions, unimpeded access to global markets, critical minerals, and high-end technology remains a non-negotiable imperative .

The US Factor: Tariff Turbulence and Strategic Response

The WTO review comes against the backdrop of extraordinary turbulence in India’s trade relationship with the United States. Just as the review was being conducted, Indian merchandise exports to the US reverted to the WTO-compatible MFN tariff structure following the expiry of the 10% surcharge imposed under Section 122 of the US Trade Act, 1974 .

According to the Global Trade Research Initiative (GTRI), nearly 92% of India’s $87.2 billion merchandise exports to the US are now covered under the standard MFN tariff regime. The remaining 8%, including steel, aluminum, and auto components, continue to be subject to high national security tariffs under Section 232 .

A New Tariff Architecture

Even as the Section 122 surcharge expired, the US moved to redraw its tariff architecture under Section 301 of the Trade Act. On July 24, 2026, the US imposed 10% tariffs on India, citing an investigation into goods produced with forced labor . This was lower than the 12.5% duty proposed in March, following India’s explicit announcement prohibiting the import of goods produced using forced labor and parallel negotiations for a trade deal .

India falls under the second tier of the new tariff design, alongside countries like Argentina, Bangladesh, Canada, Indonesia, Malaysia, Mexico, Pakistan, Sri Lanka, and the UK. Vietnam and China face 12.5% tariffs, while the EU and Taiwan received the most favorable treatment, with Section 301 tariffs applied only on products with MFN tariffs below 10% .

The US also established textile tariff-rate quotas (TRQs) for Bangladesh, Cambodia, Indonesia, and Malaysia—allowing these countries to import US cotton and textile goods for final manufacturing. No such TRQ has been announced for India, potentially giving competitors an advantage in the US textile market .

India’s Pragmatic Response

India is responding with strategic flexibility. The government is considering a fast-track preferential trade agreement (PTA) with Mexico to address that country’s new import tariffs, which could hit over $2 billion worth of Indian exports . “The only fast way forward is to try and get into a PTA because a FTA will take a lot of time,” Commerce Secretary Rajesh Agrawal said .

On the India-US trade negotiations, Agrawal said the two countries were “very close to finalising the framework” for the proposed pact, though he did not put a timeline on it .

The FTA Utilization Challenge

India’s active pursuit of FTAs is part of its broader trade strategy. Since 2021, India has signed or concluded negotiations on eight major agreements, reflecting a strategic shift towards securing durable market access and linking Indian exporters with global value chains .

However, a significant challenge remains: low utilisation of FTA benefits. According to GTRI, only 20-30% of India’s eligible exports utilise FTA benefits, compared to 60-70% utilisation by exporters shipping into India .

The reasons include:

• High compliance costs: Meeting rules of origin and documentation requirements is burdensome.

• Low foreign tariffs: Many partner countries already have low tariffs, so the incremental benefit of FTA preferences is marginal.

• Small firm preferences: Many small firms prefer to avoid compliance burden for modest tariff savings.

This is a critical oversight. If India is to leverage FTAs to achieve its 10% export share target, it must address these utilization barriers and ensure that the agreements translate into tangible benefits for exporters.

The Path Forward: Strategic Flexibility Without Cynicism

The WTO’s Trade Policy Review, coming at a time of unprecedented global trade flux, offers India a moment of reflection. The report’s prescription is clear: reduce reliance on trade-restrictive measures, address structural gaps, and deepen global integration .

But the prescription comes with a dose of realism. As one commentator noted, India must be pragmatic amid today’s trade flux: “adapt to tariffs used as weapons, play a game of warped barriers and place visible self-interest above dreamy visions of trade theory” .

Resisting Cynicism

The danger, however, is that this pragmatism hardens into cynicism. The commentator warns that “any heuristic that equates barriers with self-interest must not be allowed to harden” . The logic of free trade might still prevail globally, even if the US seems unlikely to reverse its follies. History shows that national prosperity has a clear link with trade intensity—including imports .

India must resist the temptation to retreat into protectionism under the guise of pragmatism. After all, even self-eased industrial duties could boost exports as global price discovery compresses India’s overall cost base, aiding the rise of exporters with an edge in other markets .

The Unfinished Business

The WTO review is not an indictment but an invitation. It calls on India to strike the right balance between self-reliance and openness, to engage with the multilateral trading system and its reform, and to address the structural challenges that could otherwise become roadblocks to the Viksit Bharat vision .

As India pursues its long-term objective of attaining high middle-income status by 2047, the conversation cannot be one-sided. Global markets must be open, transparent, and fair. Non-tariff barriers must be addressed. And the multilateral trading system must be reformed to serve the interests of all countries, particularly the Global South .

Conclusion: Surfing the Waves

Trade waves, whether rough or calm, are here to stay. India’s task is not to avoid them, but to learn how to surf. The WTO’s latest policy review is a signal of the direction: strategic flexibility, structural reform, and an unwavering commitment to openness—tempered by pragmatism, but never overcome by cynicism.

The journey to Viksit Bharat by 2047 will be a marathon, not a sprint. Trade will be a key enabler, but only if India can navigate the complex interplay of tariffs, non-tariff barriers, geopolitical turbulence, and domestic reform imperatives. The “balance between self-reliance and openness” will remain the central pivot of India’s trade strategy.

In the end, the lesson is clear: India must adapt, compete, and integrate. It must surf the waves, whatever the weather. And it must never lose sight of the fundamental insight that prosperity—whether at home or globally—is built on openness, not protectionism. The work has begun, but there is still a long way to go.

Questions and Answers

Q1: What were the key findings of the WTO’s 2026 Trade Policy Review of India?

The WTO’s eighth Trade Policy Review (July 21-23, 2026) highlighted India’s strong economic growth as the fastest-growing G20 economy, but also flagged structural challenges including high trade costs, regulatory complexity, infrastructure gaps, and barriers to deeper global integration . The report noted that India’s average applied MFN tariff rate rose to 15.8% in 2025-26 from 14.3% in 2020-21, with agricultural tariffs averaging 32.8% compared to 11.1% for non-agricultural goods . The WTO recommended that India reduce reliance on trade-restrictive measures and continue improving the business environment to attract investment and strengthen competitiveness .

Q2: How does the WTO report address India’s Viksit Bharat 2047 vision?

The WTO report places India’s trade policy in the context of its Viksit Bharat goal of becoming a developed nation by 2047. It states that India will need to sustain 8% annual GDP growth and increase its share of global merchandise exports from about 1.8% in 2024 to nearly 10% by 2047 . The report emphasizes that achieving this vision will require addressing structural challenges and balancing self-reliance with openness, as well as sustained engagement with the multilateral trading system and its reform .

Q3: What was India’s response to the WTO’s recommendations?

India, in its own government report prepared for the Trade Policy Review, acknowledged the need for reforms but also highlighted challenges originating outside the country . New Delhi argued that rising non-tariff barriers by some trading partners—including complex standards, conformity assessment procedures, and regulatory requirements—are constraining Indian market access . India reiterated its commitment to the multilateral trading system and said its trade policy will remain aligned with its broader reform agenda, deepening integration with the global economy while advancing a rules-based system . India also argued that unimpeded access to global markets, critical minerals, and high-end technology is a “non-negotiable imperative” .

Q4: How did recent US tariff actions affect India’s trade outlook?

Indian merchandise exports to the US reverted to MFN tariff structures following the expiry of the 10% Section 122 surcharge on July 24, 2026, covering about 92% of India’s $87.2 billion exports to the US . However, the US simultaneously imposed 10% tariffs on India under Section 301 (lower than the proposed 12.5%) citing a forced labor investigation, while Vietnam and China face 12.5% tariffs . India is also considering a fast-track PTA with Mexico to address new import tariffs affecting over $2 billion in Indian exports . India and the US are “very close” to finalizing the framework for a trade deal, according to the Commerce Secretary .

Q5: What challenges does India face in utilising its Free Trade Agreements?

India’s utilisation of FTA benefits remains low at just 20-30% of eligible exports, compared to 60-70% utilisation by exporters shipping into India . The reasons include high compliance costs, low foreign tariffs in partner countries (MFN tariffs are near zero in Singapore and below 4% in Japan, Australia, Malaysia, and the UAE), and the preference of many small firms to avoid compliance burden for modest tariff savings . Additionally, FTAs have made the inverted duty structure issue harder to fix, as finished goods can enter India duty-free while domestic manufacturers pay high duties on imported inputs sourced from non-FTA countries . The WTO noted that India has 19 active FTAs and has intensified engagement since 2021, signing or concluding eight major agreements .

The Canary’s Song: Why India Must Heed AI’s Warning Before It’s Too Late

A Global Warning from the Unlikeliest Voices

On July 13, 2026, something remarkable happened. Nearly 200 economists and AI researchers, including a dozen Nobel laureates, signed a blunt statement titled “We Must Act Now” . The signatories included Daron Acemoglu and Simon Johnson, MIT professors who won the 2024 Nobel Prize and had spent years resisting such alarms, previously dismissing much of the AI productivity discussion as “brainless” . Also on the list were the chief economists of OpenAI and Anthropic, tech leaders like former Google CEO Eric Schmidt, and academics across the political spectrum .

The statement, barely 88 words long, warns that AI “may become radically more powerful over the next 10 years” and could transform the economy faster than the Industrial Revolution, bringing both “opportunities” and “risks, including large-scale job displacement” . But as the lead coordinator, Stanford economist Erik Brynjolfsson, explained, “I still see a big gap there… I’m kind of worried that we’re not going to be ready for the tsunami that’s coming” .

Yet the most chilling admission came from the experts themselves. One signatory noted, “We are driving in fog; it is extremely difficult to predict what will happen next” . They couldn’t offer detailed policy prescriptions because, as another put it, “the rate of AI capability advancement is far outstripping our understanding of its economic consequences” . In a world where economists pride themselves on models and data, the most brilliant minds collectively admitted: we don’t know enough, but we know we’re out of time.

As Anton Korinek, a University of Virginia professor, framed the urgency: “Steam, electricity, and computers each gave societies decades to adapt; AI may give us only a few years” .

The Canaries in the Coal Mine: US Evidence of a Structural Shift

To understand why these economists are suddenly sounding the alarm, we need to look at the data that convinced them.

A landmark study from Stanford’s Digital Economy Lab, titled “Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence,” examined millions of US payroll records and uncovered a stark pattern . Since the release of ChatGPT in November 2022, employment for 22 to 25-year-olds in the most AI-exposed occupations—such as software engineering, customer service, and marketing—fell roughly 16% relative to less-exposed peers . As lead researcher Bharat Chandar explained, “For 22 to 25-year-olds, employment is falling in the most AI-exposed jobs and rising in the least exposed jobs” .

The research introduced a crucial distinction that explains this divergence: the difference between codified knowledge and tacit knowledge . Codified knowledge is the structured, learnable content found in textbooks and manuals—the stuff of entry-level jobs. AI excels at this. Tacit knowledge, by contrast, is the judgment, intuition, and experience built over years of context and practice. AI cannot replicate it . This explains why older workers in the same offices continued to be hired—they possessed the tacit knowledge that AI cannot yet replace, and perhaps even used AI to extend their span of control, further reducing the need for junior staff . What the researchers witnessed was not a general collapse of employment, but the systematic removal of the first rung of the career ladder.

The India Story: EPFO Data Shows the Same Pattern

If the US data described the canaries dying in the mine, the question was: are India’s canaries singing the same song?

The article referenced a first-of-its-kind analysis for India, using the Employees’ Provident Fund Organisation (EPFO) payroll data—India’s most comprehensive formal employment record—from April 2020 to June 2025 [citation:original]. Researchers grouped industries by AI exposure and compared indexed employment before and after November 2022 [citation:original].

The results mirror the US pattern, but with an important Indian twist. Since November 2022:

• In high-exposure industries (expert services, finance, computing), net payroll additions for workers aged 29-35 rose nearly 70% , and 54% for those over 35 [citation:original].

• But workers under 21 barely moved (+3.4% for under-18s, a negligible +1.1% for the 18-21 cohort).

• The prime fresh-graduate cohort of 22-25 years managed just 9.3% net additions [citation:original].

By contrast, in low-exposure industries (construction, textiles), even under-18s saw a 110% jump [citation:original]. As one industry observer noted, this pattern suggests that in service-heavy sectors like IT and BPM, companies are “prioritizing automation over mass entry-level hiring” . This is corroborated by reports of delayed onboarding and withdrawn job offers for fresh graduates at major tech firms .

One LinkedIn analysis described the paradox starkly: “AI attacks execution first. Humans are retained for judgment. But judgment only develops after years of execution. Remove the execution stage…and you eventually remove the people capable of judgment” . The report concluded that “if every manager now hires 2 seniors + Claude instead of 10 juniors,” the move appears rational in the short term, “but multiply that by 10,000 managers and you’ve structurally throttled middle-class formation 10 years out” .

Why This Matters for India’s Social Mobility

India’s formal sector, unlike the US, is still growing. Net additions remain positive even for the young in high-exposure industries, although they are far smaller than for older peers [citation:original]. But the relative disadvantage compounds fast where every point of formal employment matters for social mobility.

For decades, the economic “bargain” was simple: companies hired graduates for entry-level execution work, training them on the job, while absorbing tacit knowledge. That training created India’s middle class. As Hansel Pinto wrote in his analysis of EPFO data, “AI doesn’t just take margins — it takes the ladder” . The danger is that if you cut off the entry-level pipeline, you will have no experienced professionals in 10 years. “Each ‘rational’ choice to skip juniors is a vote for a smaller middle class in 10 years” .

The article also challenges a lazy assumption: that AI will hit India’s slow-skill, low-education workers hardest. The data suggests the opposite, at least for now. The young professional in expert services or finance—with a degree and textbook knowledge—faces the harshest headwinds [citation:original].

What the “We Must Act Now” Statement Means for Indian Policy

The global open letter does not prescribe detailed policy. It deliberately does not. A short statement backed by 200 economists is harder to dismiss than a blueprint inviting counter-argument . It calls for “incentives, guardrails and institutions that ensure AI complements rather than replaces humans” . For India, three conclusions can be drawn:

First, higher education must urgently rethink “entry-level readiness.” A degree that offers only codifiable knowledge is one that AI is steadily devaluing. The premium now lies in applied judgement, communication, and an ability to work with AI rather than be displaced by it. As one AI critic noted, technology is often designed to replace workers, but it doesn’t have to be this way: “The current focus on artificial general intelligence is, in all but name, an agenda for displacing humans from meaningful work. Good AI needs to complement humans, and this requires a redirection” .

Second, EPFO data deserves more attention and better access for researchers. India’s richest, most underused labour-market dataset could inform much better policy if made widely available.

Third, an AI-driven skew towards experienced workers is not inevitable. Firms that invest in apprenticeships, mentorship, and onboarding will hold an edge as entry-level talent thins out. But this requires a conscious pivot away from a pure cost-minimisation logic. Companies must recognise that “every expert was once a beginner” .

The Unfinished Business

The Stanford researchers chose the title “Canaries in the Coal Mine” carefully. Canaries die first in a coalmine with toxic gases, but their deaths serve as a warning—not a verdict . India’s young formal workers are not yet “dying” in career terms, but their birdsong can be detected in high-exposure sectors while their peers in low-exposure ones belt out double-digit growth.

The signatories of “We Must Act Now”—including the former AI skeptics—have concluded that the time to listen is now. India, with the world’s largest young workforce, must act on that warning. As one analysis concluded, the “canary is singing. It would be wise to listen.”

Questions and Answers

Q1: What was the July 2026 “We Must Act Now” statement, and why is it significant?

On July 13, 2026, nearly 200 economists and AI researchers, including 16 Nobel laureates, signed a statement warning that AI could transform the economy faster than the Industrial Revolution, creating risks of large-scale job displacement . The statement is significant because of its signatories—including former AI skeptics like 2024 Nobel laureates Daron Acemoglu and Simon Johnson—who changed their stance after seeing new evidence . The statement explicitly acknowledges that economists, policymakers, and tech leaders must act now to “understand the economics of transformative AI” and build institutions to steer AI to complement humans .

Q2: What is the “Canaries in the Coal Mine” study, and what did it find?

A study from Stanford’s Digital Economy Lab, titled “Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence,” examined millions of US payroll records . It found that since the release of ChatGPT in November 2022, employment for 22- to 25-year-olds in AI-exposed roles fell roughly 16% compared to less-exposed peers . The study introduced a critical distinction: AI is replacing “codified knowledge” (textbook learning), but cannot replicate “tacit knowledge” (judgment and experience built over years), which is why older workers in the same offices continued to be hired .

Q3: Does India show the same pattern in its employment data?

Yes. An analysis of EPFO payroll data from April 2020 to June 2025 mirrors the US pattern. Since ChatGPT’s release, high-exposure Indian industries saw net payroll additions for workers aged 29-35 rise nearly 70%, and 54% for those over 35 [citation:original]. But fresh-graduate cohorts saw far weaker growth: workers under 21 barely moved (+1.1-3.4%), and the 22-25 cohort managed just 9.3% [citation:original]. By contrast, in low-exposure industries (construction, textiles), even under-18s saw a 110% jump [citation:original]. The formal sector in India is still growing, so young workers are not seeing declines, but they are falling far behind their older peers.

Q4: Why does this create a risk for India’s middle class?

The data suggests companies are favoring experienced staff over fresh graduates, with AI automating the “execution” work that used to be the entry-level pipeline . As one industry analyst wrote, “AI doesn’t just take margins — it takes the ladder. Gradually, the resilience of India’s middle class is broken as fewer people gain the experience needed to move into higher-value work” . Judgment requires a pipeline to develop it; remove the execution stage, and you eventually remove the people capable of judgment . This could structurally throttle middle-class formation a decade from now.

Q5: What is India’s education system failing to do, according to the analysis?

The article argues that Indian higher education must urgently rethink “entry-level readiness.” A degree offering only codifiable—and hence easily automated—knowledge is one that AI is steadily devaluing [citation:original]. The premium now lies in applied judgment, communication, and the ability to work with AI rather than be displaced by it. MIT’s Daron Acemoglu (a signatory of the global statement) has argued that “good AI needs to complement humans,” but “the current focus on AGI is, in all but name, an agenda for displacing humans from meaningful work,” requiring a “redirection” in how AI is developed and deployed .