When US President Donald Trump decided to issue an executive order imposing an additional 25% duty on Indian goods on Wednesday, blaming New Delhi’s continuous imports of Russian energy, the already deteriorating US-Indian relationship reached a new low. Following the breakdown of trade negotiations, tensions between the two nations have drastically increased as a result of the most recent tariff escalation, which has essentially doubled the overall tariff rates on Indian exports to the US to 50%. Major exporting businesses have allegedly experienced waves of fear as a result of the tariff shock, and US consumers have already begun to cancel or defer orders. Now, exporters are calling for the resumption of delayed trade talks and are attempting to convince the Indian government to offer immediate tax relief. Although India’s purchases of Russian oil seem to be the direct cause of the levies, it has been reported that trade negotiations with the US also failed due to differences about opening India’s substantial dairy and agricultural industries. With other nations in the region, like Pakistan, facing substantially lower US duties, the new tariff rates threaten to seriously undermine India’s trade competitiveness, despite Indian Prime Minister Narendra Modi’s insistence that the country’s farmers’ interests not be compromised. India’s relations with the US and all the diplomatic and geopolitical power it has accumulated over the last ten or so years would probably not return as quickly, even though new trade talks may lessen some of the effects.
The actions will surely damage the reputation of an increasingly precarious BJP government, even though the majority of the Indian opposition’s reaction to this development has involved criticizing the tariffs themselves, with Rahul Gandhi, the party’s leader, calling them “economic blackmail” and others urging India to retaliate by imitating the US rates. Although they performed well in the April–May Delhi legislative assembly elections, PM Modi and his team had already lost their parliamentary majority in the previous year’s elections. This was prior to their reputation being severely damaged by Pakistan and the collapse of Operation Sindoor. The overthrow of the India-friendly Sheikh Hasina government in Bangladesh came before the defeat to Pakistan, and the new government there is unlikely to forget her close relations to India and appears to be much more receptive to Pakistan. The US president is now inviting the head of the Pakistani army to lunch at the White House, labeling India a “dead economy,” and imposing some of the highest tariffs in the world. Simply put, it has been a year filled with several international failures. It wasn’t supposed to be. India’s relations with India were becoming closer every year, and Trump’s return to the White House—who had been largely supportive of India throughout his first term—was supposed to further strengthen the already strong US-Indian connection. On paper, it appeared like MAGA and Hindutva shared many adversaries as well as a similar narrow-minded, xenophobic, and retrograde political philosophy in their respective nations. But putting all of one’s eggs in one basket is never a good idea, and India appears to have depended too much on positive ties with the US under Modi and is now suffering as a result.
The post Tariff Shock appeared first on Daily The Patriot.
