Athira Sethu
Kochi, 6 August
India is preparing to manage a difficult scenario after the U.S. President Donald Trump threatened to raise tariffs (additional taxes on foreign goods) on Indian imports soon. The tariffs may increase the cost of Indian exports to the US and harm the Indian economy.
Trump has denounced India sharply, referring to its economy as “dead” and its trade regulations as “unfair.” He has also critisized India for purchasing oil from Russia, alleging it supports Russia’s war. Indian officials were taken aback by his remarks and do not know how to react.
Trump has given India 24 hours before hiking the existing 25% tariffs even higher. Indian officials are concerned over such threat. India’s Prime Minister Narendra Modi is urging people to purchase more Indian products to contribute to lessening the harm. The government is also discussing how to assist exporters, particularly from sectors such as textiles and jewelry.
Trump’s ire is directed towards India’s close trade relationship with Russia. India imports lots of oil and military hardware from Russia. Trump wants to prevent nations like India and China from subsidizing Russia’s economy.
India is dismissing the allegations against it and refuses to give up on imports of Russian oil. India had been negotiating a trade agreement with the U.S. for several months, and both nations said they were near the deal. But now Trump has switched his approach and begun issuing fresh threats.
The government can accelerate a support scheme worth Rs 22.5 billion ($256 million) to assist exporters in competing with nations that charge lower tariffs. Officials have yet to determine how they would spend this.
India may even make a slight adjustment to its regulations and permit some U.S. dairy products into the country. That would be a giant leap, since India typically defends its dairy market in order to nurture local farmers and adhere to religious practices.
Experts say the 25% tariffs could reduce India’s economic growth. Modi’s critics say his close friendship with Trump has now backfired. Still, most believe India will not fight back but will try to solve the issue through quiet talks. India aims to maintain its robust trade ties with the U.S. on fair terms.
