Opposition parties in India have questioned the far-right BJP-led central government over its failure to respond to the announcement by US President Donald Trump of a blanket 26% tariff on all imports from India. They have accused the government of failing to protest the interests of the country claiming that high tariffs will destroy the Indian economy.
US President Donald Trump announced the new reciprocal tariff rates against most of its trading partners, including India, on Wednesday, April 2. The new tariff rates would be different for different countries. For example, Chinese goods would be charged at 54% tariff while the goods from Australia would be charged at 10%.
Read more: Trump announces sweeping “reciprocal” tariffs against key allies
The policy is considered a massive disruption to global trade and has been called variously as “tariff war” and “trade war” by the commentators. However, Trump claimed that the new tariff policy is merely a response to the “anti-American policies” of its trading partners.
Ever since Trump came back to power, his administration has repeatedly claimed that its trading partners impose high tariffs blocking its products to enter their markets which “suppress domestic wages and consumption” and “constitute an unusual and extraordinary threat to the national security and economy.” Trump announced its reciprocal tariff regime last month and detailed the rates yesterday.
However, Trump claimed on Wednesday that the new tariff rates are only half to what other countries charge on American products. He has even claimed that the new policy is sensitive to the need of protecting the interest of other economies and therefore not fully reciprocal.
The new tariff rates will be applicable in full from April 9. Meanwhile, Trump announced a 10% blanket baseline tariff on all goods entering the US.
Speaking about India, Trump reiterated his accusation of it being one of the “worst offenders” charging very high tariffs on US goods and services while “we charge nothing for years and years and decades.”
According to Trump’s executive order, before the imposition of reciprocal tariffs, the average tariff on Indian imports was one of the lowest at 3.3%. In comparison, the average tariff from India was 17%.
Disastrous for Indian economy
The US is India’s second largest trading partner with a cumulative trade of around 120 billion US dollars in 2023-24. India exports mostly electronic goods, gems and jewelry, and chemicals and pharma products. Except the Pharma industry which is exempted from the new tariff regime, most other industries are expected to suffer due to the high tariffs.
Electronics and gems and jewellery are the sectors going to be the worst affected by the new tariff regime. India exported 14 billion US dollar worth of electronics goods and 9 billion of gems and jewelry to the US last year.
Citing examples of various other countries such as China, Canada and Mexico who announced some kind of policy initiatives or retaliatory measures to pressure the US to abandon its tariff war, the Indian opposition questioned the silence of the government led by Bharatiya Janata Party (BJP).
Prime Minister Narendra Modi visited the US in February to discuss some of the issues related to tariffs. The joint statement issued after the visit also talked about negotiation on a new trade agreement between both the countries to short out the differences over the tariff rates.
As per the reports, India has expressed its willingness to reduce tariffs on some of the imports from the US such as motorbikes and bourbon whisky. However, none of these prevented Trump’s move on Wednesday.
Surrendering Indian interests
Reacting to the Modi government’s complete silence on the matter, Communist Party of India (Marxist) coordinator Prakash Karat called it a “shameless surrender” of the country’s interests.
Noting that high tariffs “will badly affect India’s industries and economy,” Karat called on the government to take immediate steps to retaliate against the move.
Karat called the government’s inaction not so surprising as it has never responded to Trump’s earlier threats against the country. “Modi declares himself a friend of Trump, that the Indian government has so far not even reacted and is trying frantically to make adjustments to our tariff to appease the US while other countries such as Canada, countries in Europe have come out strongly and said they will take retaliatory action” he said.
The main opposition party Indian National Congress (INC) too questioned the persistent silence of the Modi government over the Trump administration’s repeated assaults on the country’s interests. It accused the government of trying to evade its accountability by keeping silent and demanded a formal clarification.
