Its like selling the things inside your your right hand to left hand.
Gross misrepresentation of how economy works.
A) We aren't selling any high end or critical product to USA. Most of the sectors are being heavily automated. These were always unsustainable just like IT sectors reliance on Big Techs orders.
That's why you see China heavily investing in creating capabilities in higher value chain. Like advanced electronics, softwares, AI, advanced railway systems, cyber security, semi conductor etc. and it hasn't started now but since more than decade ago.
Otherwise their export dependent economy would have collapsed sooner without resistance. For all the talk of China+1.. +1 is hard because China now provides goods that are critical. Not just cheap labor anymore. Using cheap labor as advantage for export is a thing of past with closing window. Hence, you won't see any big transformation in Bangladesh or vietnam in long term. Even indian IT industry is facing loss with AI replacing the need of cheap low level programmers. Indian IT sector failed at upgrading itself while China applying same model in past for manufacturing has upgraded itself to good degree. Hence, my skepticism about legacy corporates.
B) You are thinking India as a body and thinking that exchange of products inside is less impactful.. when that's the basis of economy and trade. "Consumption"
Let's break it down. While it's good to picture india as one body doing trade with a other body ( USA) .. it's not the foundation.
At the end of the day people earn by two common things.. providing services or providing goods. It doesn't matter if that buyer is indian or American. As long as one earns, he gets means to survive, grow and consume ( that's +1 customer for other providers).
He can employ too.. creating a positive cycle. How does govt earns? Through taxes.. voila. Revenue generation.
Now the issue is that as world is advancing technologically.. the needs are also advancing at both individual and societal level. And India lags behind in Indian sellers of the technology ( software+ hardware) of high level. Leaving us dependent on other economies for it. That means we are essentially paying other "body" helping their people economically with not enough wealth generation in India itself. Even for indigenously assembled or manufactured..if it's dependent on licensing from foreign OEM, the wealth generation remains sub-optimal. Add to that lack of govt authority over foreign entities.
Now you've two option.. sell your own product to mitigate losses ( which I have addressed above) or build indian, in India for India. Have a positive cycle of wealth generation in India. India has an advantage that it has high population resulting in potential of high number of customers, workforce etc.. but all that is just potential if untapped. And while govt has started focusing on it in recent years and flipped the narrative .. earlier population was considered a burden. And still needs huge reforms, policies, ecosystem to further progress. As mentioned in my above post.
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is same in 2025 too, they proved that in 2020 Galwan incident. Also in 2025, by providing crucial intelligence to pak during op Sindoor.