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Mint
a minute ago
- Mint
India's economy faces bumpy road in face of steep Trump tariff
Trump said Indian imports would be hit with an extra 25% levy as punishment for buying Russian oil, on top of a 25% tariff that had been previously announced. India's growth outlook has been weighed by President Trump's punitive tariff on the South Asian economy but there's still hope negotiations will ease the impact. Trump on Wednesday said Indian imports would be hit with an extra 25% levy as punishment for buying Russian oil, on top of a 25% tariff that had been previously announced. Indian exports to the U.S. now face a hefty 50% tariff, jolting longstanding efforts by both Washington and New Delhi to deepen ties in a bid to counter China's growing influence in the Indo-Pacific. The new tariffs will go into effect 21 days after Trump signed the order Wednesday. India condemned Trump's new tariffs over its purchases of Russian oil as 'unfair, unjustified and unreasonable." Market reaction to the Trump announcement has been relatively muted. The Indian rupee weakened slightly against the dollar, while the benchmark Sensex stock index slipped 0.35%. Analysts think the tariff increase could intensify risks for India's growth outlook as the export sector's competitive edge as a regional manufacturing hub would be undermined. At the new rate, 'India's tariffs would actually be higher than not just its export competitors such as Vietnam, but also China's tariff rates across a whole range of products," Michael Wan, senior currency analyst at MUFG, said in a note. 'If effective, the steep 50% tariff would be similar to a trade embargo, and will lead to a sudden stop in affected export products," Nomura research analysts said in a note. When the initial 25% tariff on Indian imports was announced, Goldman Sachs analysts estimated that would shave about 0.3 percentage point off India's growth this year. They now think this hit could double if India is hammered with a 50% rate. However, Goldman Sachs said in a report that no changes to its 2025 growth forecast of 6.5% are warranted at the moment, given that there is a three-week window for India to negotiate with the U.S. before the increased tariffs take effect. Aastha Gudwani, economist at Barclays, said the heightened tariffs could be a 'continuation of pressure tactics, and final U.S. tariffs on India will settle in lower than the announced 50% rate." The incremental tariff doesn't target India's trade deficit with the U.S., but is instead aimed at the 'threat" of Russia, Gudwani said in a note. MUFG's Wan warned that there could be broader economic implications for global oil markets. 'It is unclear how much space there is for negotiations between the U.S. and India in reality, and whether other countries which also buy Russia oil such as China would also have tariffs imposed on them," Wan said. 'If India were forced to find alternative barrels of oil, the indirect spillover impact to global oil prices should not be underestimated," Wan said.
India Today
a minute ago
- India Today
Trump hits India with 50% tariffs: What's at stake and what next?
The US has imposed a sweeping 50% tariff on Indian exports, pushing US-India trade tensions to a rare low in over two decades. The move primarily targets India's imports of Russian oil, which Washington claims is funding Russia's war in 55% of India's exports to the US will face these tariffs, affecting key sectors such as textiles, gems and jewellery, leather goods, auto parts, and 2024, India will export around $87 billion worth of goods to the US, its largest export market. These tariffs place Indian exporters at a 30-35% cost disadvantage compared to competitors like Vietnam and Bangladesh, who face much lower US duties. The impact is severe for India's export-dependent economy. Experts describe this as the worst crisis in recent US-India Kugelman of the Wilson Centre called it 'the worst crisis' in two decades of strategic ties, warning about the widespread disruptions it could cause, although he noted that the broader relationship still retains the additional tariffs, there were some immediate effects. The Indian rupee weakened, and stocks of export-reliant companies dropped. Reports indicate US buyers have begun pausing Indian orders, seeking alternative suppliers in countries like Vietnam and warn that without quick resolution, these sudden tariffs could trigger supply chain disruptions and substantial layoffs in labour-intensive MAINTAINS STANDThe Indian government has strongly objected to the tariffs, calling them 'unfair, unjustified, and unreasonable.' Officials stressed that India's oil imports from Russia are driven by the need to ensure energy security for its 1.4 billion people amid a volatile global Ministry of External Affairs highlighted that other countries also import Russian oil and accused the US of unfairly singling out India. While trade talks remain stalled, a 21-day window before the second tranche of tariffs take effect offers limited scope for diplomatic engagement and possible partial rollback if India amends its Russian oil tariff escalation comes at a time when India and the US had been engaging in trade talks, which collapsed over contentious issues such as India's unwillingness to open sensitive agricultural sectors to US administration had pushed for slashing India's trade surplus and increasing market access, but stalled negotiations ended with the ON INDIAEconomists estimate the direct impact on India's GDP growth may be moderate—a contraction of about 0.2 to 0.6 percentage points in 2025, but warn the damage to export sectors and employment may be much PHD Chamber of Commerce report projects the tariffs will initially hit $8 billion of Indian exports, with wider economic effects as duties take full major industries like auto components, which export about $7 billion annually to the US, also face exposure to these tariffs, threatening jobs and electronics and pharmaceuticals are exempted for now, crucial manufacturing and labour-intensive sectors bear the HAPPENS NEXT?Political leaders and business voices in India call for rapid market diversification toward Europe and Asia to reduce dependency on the US. Senior Congress leader Shashi Tharoor called the tariffs a 'blow' that will make Indian goods unaffordable in the US and urged urgent expansion into alternative markets with existing free trade Minister Narendra Modi and officials have vowed to protect farmers, fishermen, and workers, emphasising national interest and energy the new tariffs could have a devastating impact on India's export sector, some voices in Indian industry are calling for a bold pivot. Business leader Anand Mahindra argues the moment could act as a trigger—much like the 1991 crisis—for long-overdue structural reforms that could transform India's economic 50% tariff marks a key turning point in US-India trade ties, testing both economic resilience and political resolve. The next three weeks will be crucial, as New Delhi weighs how to protect energy security while defending export revenues and jobs.- EndsTune InMust Watch
India Today
a minute ago
- India Today
Open office, closed minds? Why babus feel exposed in Kartavya Bhavan
In a world that is killing silos, at least in office spaces, top central government officers are bemoaning the loss of cabin confidentiality in the Kartavya Bhavan that was inaugurated by Prime Minister Narendra Modi on Wednesday. To be fair to the officers, a cabin provides not just the feel of being in power, but also the shield from being seen and heard doing things that might be Kartavya Bhavan on New Delhi's Kartavya Path is an ambitious project to bring central ministries and departments under one roof for seamless the government seems to have ignored the cornerstones of parampara, pratistha, anushashan while planning the corner offices. How can babus function openly in the open? Babudom thrives in hushed voices, confidential calls and discreet deals. A cabin is a must for fearless is among the core necessities of their competencies. And babus have themselves complained that the rights of the Homo Derelictus, a species whose sightings in office spaces are rare, are being Central Secretariat Service (CSS) Forum, which represents the "collective interests" of over 13,000 officers, expressed the grouse in its letter to the Prime Minister's Office (PMO)."CSS Officers are being allotted less space than mandated, impacting confidentiality and efficiency," says the letter from Yatendra Chandela, general secretary of the CSS Forum, on the seating arrangement in Kartavya says Under Secretaries, who handle highly sensitive and confidential matters, require private workspace."However, they have been provided open office space, wherein their telephonic and in-person discussions with senior authorities and other officials can be easily overheard, posing a serious risk to confidentiality," the officers' forum argues in the letter to the Principal Secretary of the state-of-the-art building, consisting of swanky conference rooms, modern amenities and CCTVs, will house the offices of the ministries of Home Affairs, External Affairs, Rural Development, MSMEs, DoPT, Petroleum and Natural Bhavan-3, inaugurated by PM Modi on Wednesday, is the first of the 10 Common Central Secretariat (CCS) buildings in the complex. Two of the 10 buildings have neared completion and are likely to be inaugurated next month, according to a PTI complex is part of the Central Vista redevelopment the vision is to create interdepartmental synergy among the many ministries, the open-space working culture is foreign to Indian babudom, which has roots in the British-era colonial the older set-up, even Section Officers had rooms, though shared, while Deputy Secretaries and Under-Secretaries had individual rooms, according to letter from the officers' forum reveals that not just Section Officers, but even Under Secretaries have been sent to the open-seating an arrangement... also creates a demoralising environment for officers who rightfully belong to the Central Secretariat's core staffing structure," the babus lack of cabins is "demoralising" for the officers, they say. That's understandable. How can officers who take calls on important matters be seen among junior staffers?Office spaces need to reinforce the class structure. Feed the sense of India's caste-conscious heartland, the babus (IAS and IPS officers) are considered to be a social class of their own, which transcends the varna system and tops the dowry offices can never match the aural big O that comes from hearing the cautious, feeble knocks on the cabin door. That while sitting on babus have also complained about how office space for Section Officers and Under Secretary-level officers "has been created by putting low-height almirahs, which not only compromises privacy but also causes intermittent distractions". This, they say, hits their "critical thinking essential for analytical work".The bemoaning of the loss of partition is understandable. Babus have been an integral part of erecting barriers, and not only corralling themselves from the common folks, but work with efficiency as and red tape go hand in hand. The Ease of Doing Business runs contrary to their babus need to realise the world has moved on. Their cravings and demands are anachronistic. This is a world that works on pay-per-view and salary for service. But for that they will have to step out of the cabin and closet mindset. They have to realise the address is Kartavya Path, not Entitlement Path.- EndsTune InMust Watch
