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India Today
6 days ago
- Business
- 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
6 days ago
- Business
- India Today
Trump tariffs spark 'worst crisis' in US-India ties, says Michael Kugelman
US President Donald Trump on Wednesday signed an executive order imposing an additional 25 percent tariff on Indian imports, sparking a wave of concern about the future of US-India ties. He also threatened to impose 'secondary sanctions' on New Delhi over its continued purchase of oil from Kugelman, Director of the South Asia Institute at the Wilson Centre, called it "the worst crisis" in two decades of the strategic partnership between the two think this is the worst crisis that the relationship has faced over the last two decades of strategic partnership," Kugelman told news agency ANI, warning that the penalties could have a "damaging impact" on the broader US-India relationship. The White House announcement marks an escalation in tensions, especially as India has remained firm on continuing energy imports from Moscow despite US pressure. The Trump administration has increasingly tied economic penalties to foreign policy grievances -- and India appears to be next in line."Unfortunately, given just how the relationship has been developing in recent days, this new announcement is not all that surprising," Kugelman said."Despite the damaging impact this could have... it's not that much of a surprise to me that in the end the President decided to follow through on his threat," he this could be seen as a low point in bilateral ties, Kugelman believes the relationship is not beyond saving."This is a relationship that is multifaceted and has many different areas of cooperation that play out on parallel tracks," he said. "It has the insulation to withstand shocks to the broader relationship."When asked why President Trump has chosen to punish India and not China, despite similar economic ties with Russia, Kugelman offered a blunt assessment."China has not stood out there and refused to let President Trump take credit for his role in the ceasefire... These are things that happened with India. So I think that's why perhaps President Trump would reserve some of his greatest ire on the trade and tariff front for India... Indeed, it's a double standard. It's hypocritical, whatever you want to say."TRUMP SAYS CHINA COULD FACE INDIA-STYLE TARIFFSPresident Donald Trump also hinted at imposing further tariffs on China, similar to the 25 per cent duties recently applied to India over its Russian oil purchases."Could happen," Trump told reporters when asked about additional sanctions on China. He added that more secondary sanctions are expected to increase pressure on Russia to end the conflict in Ukraine.- EndsWith inputs for agencies Tune InMust Watch
Mint
09-05-2025
- Politics
- Mint
JD Vance's ‘none of our business' remark on India-Pak tensions echoes Trump-era foreign policy, says Michael Kugelman
After US Vice-President JD Vance remarked that the ongoing conflict between India and Pakistan is 'none of their business,' a Washington DC-based South Asia expert Michael Kugelman has said the comment reflects a 'broader shift in American foreign policy'. Kugelman, a prominent analyst and Director of the South Asia Institute at the Wilson Centre, suggested that Vance's statement aligns with the Trump administration's general stance on global affairs. 'I think on the whole, the read I have of what JD Vance said is that it really reflects the Trump administration's broad view of foreign policy,' Kugelman told media. 'That is, that the US should not be over-extending itself in international affairs.' He added that while Washington might support de-escalation in principle, it is unlikely to devote serious diplomatic resources to mediating the conflict. 'It's happy to express its desire for India and Pakistan to de-escalate, but the US is not going to expand significant levels of bandwidth to try to get the two sides to de-escalate,' Kugelman said. 'That would be a significant change from the first Trump administration.'
South China Morning Post
03-04-2025
- Business
- South China Morning Post
India and Sri Lanka set to sign defence pact amid China's rising regional clout
The visit by Indian Prime Minister Narendra Modi to Sri Lanka is seen as another step by New Delhi to counter China's rising influence and presence on the island nation, with observers citing a landmark defence pact to be signed by the South Asian neighbours. Advertisement Delhi and Colombo will finalise key agreements such as the set-up of solar-power plants during Modi's trip over the weekend, following up on talks that began when Sri Lankan President Anura Kumara Dissanayake visited India in December. Both countries will also strengthen bilateral trade, focusing on textiles, pharmaceuticals, and information technology, as well as sign a defence deal, according to Indian media reports. Analysts said the defence deal was set to be one of the most significant milestones in relations between Delhi and Colombo in recent years, with both sides expected to increase military cooperation through joint maritime surveillance, exercises and equipment support. Modi will be the first foreign leader to be hosted by Dissanayake who was sworn into office last September. Advertisement Michael Kugelman, director of the Wilson Centre's South Asia Institute, said the visit came amid growing competition between India and China to forge closer ties with the littoral states of South Asia, including Sri Lanka.
South China Morning Post
20-03-2025
- Politics
- South China Morning Post
US-China rivalry forcing Southeast Asia to pick sides, congressional panel hears
Southeast Asian countries now recognise they may have no choice but to take sides in the Sino-American rivalry, at least in certain sectors, even as they seek to avoid that dilemma, a US congressional advisory panel heard on Thursday. Advertisement Moreover, this reality should prompt Washington to adopt a sector-by-sector approach to the region and shape its choices before Beijing does, according to testimony given at the US–China Economic and Security Review Commission. 'Increasingly, they are accepting that, even though they don't like it … they might have to choose on specific issues,' said Lynn Kuok of the Washington-based Brookings Institution, referring to Southeast Asian countries. With that in mind, the US should view competition in the region in terms of 'swing sectors' and not 'swing states' as other observers have suggested, said Prashanth Parameswaran of the Wilson Centre, also a Washington think tank. Swing states are countries that possess clout but are not firmly aligned with either the US or China. Jon Finer, US deputy national security adviser in the Biden administration, advocated prioritising ties with Southeast Asian heavyweights like Indonesia. Photo: White House
