Editor's Mailbox from August 15, 2025
In the current technological era, the role of independent directors has become more critical, yet challenging. The responsibility of maintaining corporate governance has put many independent directors in a precarious situation, prompting some to quit [1]. To navigate this new landscape, a better option is to select and appoint independent directors with the latest technological knowledge [2].
The US-India relationship has been tested recently due to trade tariffs. The US imposed a 25% tariff on Indian imports, with the potential for it to increase to 50%, primarily due to concerns over trade imbalances, high barriers to US exports, and India's continued importation of Russian oil amid the Russia-Ukraine conflict [3]. This move aims to pressure India into opening its markets further and to discourage its purchase of Russian oil, which the US argues financially supports Russia's war efforts [3].
The impact on India-US relations has been tense. The tariffs risk disrupting the strategic partnership by creating economic friction. Experts warn that such tariffs could backfire by pushing India closer to rival powers like China and Russia, undermining US influence in the region and potentially triggering retaliatory measures [4]. Economically, the tariffs may harm both countries through supply chain disruptions and higher costs, slowing growth and fueling inflation in the US [5]. Indian markets have shown pressure in reaction to the tariffs, reflecting investor concern over increased trade barriers [5].
Independent directors, who play a crucial role as conscience keepers of companies, face legal risks due to possible or suspected corporate mis-governance [1]. In this context, they can no longer be passive participants in board meetings. The amended regulations for independent director positions by SEBI, effective from 2022, require them to have specialized skills and scrutinize the operations and governance of the company [1]. Equipping independent directors with the latest knowledge through training is helpful in this regard [2].
The focus on human capital formation is crucial for India to become a developed nation. Enhancing the skills of the youth can accelerate the per capita real income on a sustained basis [6]. Prime Minister Modi emphasized 'Reform, Perform, Transform' in his Independence Day speech, highlighting the importance of this focus [7].
Meanwhile, the US and China have extended the tariff truce deadline till November 10. During the interim period, China will attract a 30% levy [8]. The economic development of a nation relies on the investment in education and healthcare, both of which are vital components of human capital formation [9].
As the world watches the outcome of the Alaska Summit between President Trump and President Vladimir Putin, it remains to be seen how these geopolitical developments will shape the future of India and its relationship with the US. Every adult in India should be employed productively and lead a healthy life, and the role of independent directors will continue to be crucial in ensuring this vision becomes a reality.
References:
- The Indian Express
- The Hindu BusinessLine
- The Economic Times
- The Diplomat
- Bloomberg
- The Times of India
- NDTV
- CNBC
- World Bank
- In light of the challenging role and risks faced by independent directors, enhancing their technological knowledge might be a strategic policy-and-legislation move for corporate governance.
- The US-India relationship has been strained due to trade tariffs, potentially leading to India seeking closer relationships with rival powers like China and Russia, as warned by experts in the general-news field.
- Striving for human capital formation in India is essential for its transformation into a developed nation, as emphasized by Prime Minister Modi, with education and self-development playing vital roles in this process.
- Simultaneously, it remains crucial for independent directors to proactively scrutinize company operations, a requirement instituted by the amended regulations for independent director positions by SEBI.
- The economic situation may be further shaped by geopolitical developments, such as the outcome of the Alaska Summit between President Trump and President Putin, and these events are a topic of interest for editorial discussions amid the ongoing US-China trade disputes.
