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| image: PM Modi & PM Trump |
India’s continued purchase of Russian crude oil has triggered a fresh round of U.S. tariffs, with President Donald Trump imposing an additional 25% duty on Indian exports. This move has doubled the overall tariff burden on Indian goods to 50%, posing a severe challenge for the country’s economy and export sector.
Earlier, on August 7, Trump had warned of such action, after
India, along with 70 other countries, was hit with an initial 25% levy. Despite
a 21-day negotiation window, no resolution was reached. Prime Minister Narendra
Modi has maintained that while the pressure will increase, India will not
compromise on the interests of farmers, small industries, and livestock
keepers.
Congress Attacks Modi Over "Superficial
Diplomacy"
The opposition Congress party has sharply criticized Modi,
claiming that India is set to lose ₹2.17 lakh crore across 10 key
sectors due to these tariffs. Congress president Mallikarjun Kharge alleged
that Modi’s “smiles, hugs, and selfies-driven shallow foreign policy” has
harmed India’s interests.
Party leader Jairam Ramesh went further, mocking Modi for copying Trump’s
"MAGA" slogan with what he called “BHIGA” and later “MEGA,” arguing
that these optics have now become a headache for India.
Exporters Seek Urgent Relief :
The Federation of Indian Export Organisations (FIEO)
and the Apparel Export Promotion Council have appealed to the central
government and RBI for immediate support. Industry associations are demanding:
- One-year
extension on loan repayments
- Interest
subsidies
- Corporate
tax cuts
- Development
of international warehouses
Meanwhile, the government is considering relief measures and
scouting for alternative export markets.
Private Investments at Risk :
Credit rating agency CRISIL has warned that U.S.
tariff uncertainty could stall private-sector investments in India. Companies
may delay new projects until there’s clarity. While the government is boosting
spending on infrastructure to offset the slowdown, experts say only free
trade agreements (FTAs) can restore investor confidence.
Potential Fallout on Indian Economy :
- 55–66%
of Indian exports to the U.S. directly impacted
- 0.4%–0.5%
drop in India’s GDP growth projected due to tariffs
- 70%
fall in overall exports feared, according to GTRI estimates
- 20
lakh jobs at risk across export-dependent sectors
Key Sectors Hit :
Textiles, gems & jewelry, leather, furniture, fisheries.
A Washington-based Asia Group expert warned that the 50% tariff will significantly hurt India’s textile and apparel exports, making Indian goods costlier in the U.S. and less competitive. Companies that had been shifting supply chains from China to India under the "China+1" strategy may now rethink their plans.
India Holds Firm on Russian Oil :
Despite the tariffs, India has refused to scale back its
purchase of Russian crude, citing cheaper prices that benefit domestic refiners
and strengthen energy security. Government sources indicated India will stay
firm on this policy.
Global Concerns and Accusations :
Former U.S. trade official and Asia Group adviser Mark
Linscott cautioned that frozen negotiations could damage U.S.–India economic
ties if a resolution is not reached soon.
Adding to tensions, U.S. Treasury Secretary Scott Bessent
accused India of reselling Russian crude for profit. India, however, slammed
the tariffs as “unfair and excessive.”
A Message of Resilience -
During a discussion with Prime Minister Modi, Fiji’s PM
Sitiveni Rabuka remarked: “Someone may not be happy with you. But you are
capable of overcoming these challenges.”
