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This Week in Explainers: What will be the cost of Trump's 50% tariffs on India?
A man reads a newspaper with reports on tariffs after US President Donald Trump announced an additional 25 per cent tariff on Indian goods, alongside a market in New Delhi. Reuters
The United States calls India a 'strategic partner'. However, it didn't seem that India and the US were on the same page in the week gone by.
US President Donald Trump continued his trade tirade against India this week, slapping a 25 per cent tariff on New Delhi for its purchase of Russian crude oil. This came in addition to the 25 per cent he already levied on India, which came into effect on August 8. Many experts note that Trump risks tanking 25 years of US-India relations.
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The trade war between India and the US has also resulted in a realignment in geopolitics. India and China, who have been rivals for years, found themselves on the same page with both of them striking a defiant note against America. Moreover, news emerged that PM Modi would be attending the SCO Summit in China's Tianjin, a first for the PM since 2020.
This week also saw death and destruction as a result of the Uttarakhand cloudburst. More than 100 people still remain missing after the cloudburst led to flash floods in the Dharali village of the hill state. The disaster has caused unprecedented destruction — roads have been damaged and houses have been destroyed. The Army has also been called in to help with rescue operations, which continue at a slow pace owing to the location of the village.
Speaking of the army, big headlines were made when an Indian Army officer roughed up SpiceJet staff at Srinagar airport over a dispute of extra baggage. The airline staff allege that the officer became violent, and beat them up causing them serious injuries.
If you want to unpack all of this and the other big headlines from this week, our weekly roundup is here for you.
1) Pushing forward with his earlier threats, US President Donald Trump announced a 25 per cent tariff on India as punishment for buying Russian oil. The penalty is in addition to the 25 per cent tariff India already faces, making it subject to one of the US's highest import tax brackets under Trump, at a total of 50 per cent.
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In his executive order, Trump explained that Russia's continued military actions in Ukraine constituted a 'national emergency' and it was therefore 'necessary and appropriate' to place heightened tariffs on India, a major consumer of its petroleum products. 'I find that the Government of India is currently directly or indirectly importing Russian Federation oil,' Trump wrote.
The move imperils India's trade with the US as well as its economy. While some experts stated that the tariffs could lower the GDP growth by one per cent, others noted that Indian goods especially in the textile, gem and chemical sectors would lose its competitiveness in the US market.
If you are wondering just how badly India would be hit by the tariffs, read our detailed analysis here.
2) Trump's reason for levying a whopping 50 per cent tariff on India is its continuous purchase of Russian oil, which the US president deems to be financing Russia's war against Ukraine.
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But India has defended its move, saying its purchase of Russian crude is 'based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India. The Ministry of External Affairs in a statement also noted that the 'very nations criticising India are themselves indulging in trade with Russia'.
But did you know that the purchase of Russian oil doesn't just serve India's interests but the world at large? Here's how.
3) Amid this tariff drama, India remains committed to its ties with Russia. National Security Advisor Ajit Doval was in Moscow this week as part of a pre-planned visit aimed at strengthening ties between the two nations.
This visit gained even more prominence as it came amidst threats and the eventual tariff levied by Trump on India for its oil trade with Russia. This has got many asking — why is India keen on its ties with Moscow? Our detailed essay explains the multiple reasons why Delhi-Moscow ties continue despite it all.
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Trump's 50 per cent tariffs on India seems to be changing the political scenario. New Delhi found an unlikely partner in its defence of purchasing Russian oil – China. File image/Reuters
4) On the issue of tariffs, India has found an unlikely partner — China. As Trump announced that he would levy a tariff on nations trading with Russia on oil, both countries — who import crude — hit back at the US over the move.
India said was unjust and unreasonable for America to levy tariffs on it while the US and Europe continued trade ties as well. China was more defiant in its stance. Its deputy permanent representative to the UN said, 'The US itself continues to engage in trade with Russia to this day. Why should it be acceptable for the US to do so, but not for others? Isn't this 'only allowing oneself to set fires while forbidding others from lighting lamps'?'
Also, amid this drama, a further thaw in India-China ties came with the news that PM Modi would be visiting the Asian country later this month for the SCO summit. What does this mean for world politics? Should the US be worried?
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A portion of a road collapsed, near Bhatwari in Uttarkashi district, Uttarakhand. The collapsed road had stalled the ongoing rescue operations at flood-hit Dharali in Uttarkashi. PTI
5) Earlier this week, a cloudburst resulting in flash floods caused unprecedented damage in Uttarakhand's Dharali village, with five people and over 100 yet missing. The devastation has put a spotlight on the hill state and its brush with natural disasters.
But why is it that Uttarakhand is vulnerable to natural tragedies?
6) Travelling by air can often be challenging. You have to be mindful of what you are carrying and how much. And this week, an Indian Army officer got into trouble over this very issue — extra baggage.
An Army officer, Ritesh Kumar Singh, faces charges and a police investigation after he assaulted staff of SpiceJet at Srinagar airport. The scuffle occurred after he was asked to pay for excess baggage.
The Indian Army said it was looking into the incident and would decide on the further course of action based on the outcome of the investigation. 'The Indian Army is committed to upholding the highest standards of discipline and conduct and takes all allegations seriously,' its public relations office said.
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But what went wrong? Why did the soldier resort to violence in the first place?
7) Talking of the Indian Army, Bollywood is releasing a new movie on the heroics of Major Shaitan Singh, who valiantly led 120 Indians against Chinese troops in the Battle of Rezang La. The movie, titled 120 Bahadur, stars Farhan Akhtar. As you await the release of this movie, here's the true story of the hero.
And this marks the end of our weekly wrap. Bookmark this page if you would continue to read more of our reports.
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