📦 Are imports really bad for the economy? Modi says Make in India. Trump says Make in America. But what does economics say? In this video, we break down one of the most misunderstood parts of the GDP formula — (X - M) — and explain why imports don’t hurt GDP the way politicians make it seem. From India to the US, nationalist policies push for local manufacturing and fewer imports. But is that always a good idea? We dive into the truth behind the numbers, the logic behind GDP, and why global trade might actually make us richer. 👇 Drop your thoughts in the comments: -------------------- ⏱️ Time Stamps 00:00 - PM Modi's Ganesh idol comment 02:02 - Channel subscribe reminder 02:52 - What GDP actually means 04:18 - The secret: Imports hidden in C, I, G 06:52 - Example 1: Imported chocolates 07:56 - Example 2: Maruti car with imported parts 08:31 - Example 3: Maruti exports the car 09:08 - Example 4: Indian pharma industry 09:46: Treatment of imports in GDP - Revisited 10:44 - Growing avocados rather than importing them 11:53 - Opportunity cost concept - Choosing between Avocados and Apples 14:15 - Tim Harford's babysitter story 17:25 - Why the formula was designed this way 16:10 - Are trade deficits bad? 17:55 - Ways to finance deficits: FDI, FPI, borrowing 19:08 - Credit card analogy for trade deficits 20:48 - How harsh trade policies make people poorer? 23:27 - Final message: Don't follow Modi's suggestion - Trade wars, not imports reduce the GDP ------------------- 📚 Sources and Further Reading: 1. Noah Smith’s ‘Trade deficits do not make a country poorer’ - https://www.noahpinion.blog/p/trade-deficits-do-not-make-a-country 2. Noah Smith’s ‘Imports do not subtract from GDP’ - https://www.noahpinion.blog/p/imports-do-not-subtract-from-gdp 3. The Economist’s ‘Don’t blame imports for the fall in America’s GDP’ - https://www.economist.com/finance-and-economics/2025/05/01/dont-blame-imports-for-the-fall-in-americas-gdp 4. St. Louis Fed’s ‘How Do Imports Affect GDP?’ - https://www.stlouisfed.org/publications/page-one-economics/2018/09/04/how-do-imports-affect-gdp 5. Tim Harford’s ‘A trade deficit with a babysitter’ - https://timharford.com/2005/12/a-trade-deficit-with-a-babysitter/ 6. Wall Street Journal’s ‘Exports Good, Imports Bad? It's Not So Simple’ https://www.wsj.com/articles/BL-REB-22787 7. Council on Foreign Relations’ ‘The U.S. Trade Deficit: How Much Does It Matter?’ - https://www.cfr.org/backgrounder/us-trade-deficit-how-much-does-it-matter 8. India Today’s news piece about PM Modi’s speech - Even Ganesh idols imported: PM's 'Make in India' appeal to check China dumping - https://www.indiatoday.in/india/story/pms-make-in-india-appeal-to-block-china-dumping-ganesh-idols-2731358-2025-05-27 ------------------- 👉🏼 Follow Me on - LinkedIn - https://www.linkedin.com/in/swapkar Twitter - https://twitter.com/Swap_Kar Instagram - https://www.instagram.com/swap_kar/ Blog - https://econgullyblog.wordpress.com/