AA Edit | India Braces for Trump’s Sanctions
India did the right thing in not being forced into signing an unfair trade deal that was featured in extensive talks
The dreaded day is here on which the Trump sanctions on India, which come as a 25 per cent additional penalty on goods exported on top of 25 per cent tariff, kicked in. Taking the “tiger” line in choosing to defy the US President rather than try to placate him or flatter him with nominations for the Nobel Peace Prize, Oscar or Emmy, India joins Brazil, China and Russia in a trade war with the United States.
India did the right thing in not being forced into signing an unfair trade deal that was featured in extensive talks. Prime Minister Narendra Modi declared that there will be no compromising the interests of farmers, cattle handlers and small-scale industries. It is clear there will be no kowtowing to demands that came with the threat of putting up trade barriers against a country that loyalist aides closest to Trump say they love.
It is no comfort for India to be singled out for using Russian crude purchases for its energy security even as China and Europe, which keeps importing Russian natural gas for energy needs as well as to heat its homes in winter, are spared the ordeal. Its denial of any Trump role in stopping an India-Pakistan war is echoed by the Pakistan foreign minister too, but the US President is taking his animus against India to an unprecedented level.
The PM is appealing to consumers to buy India-made goods, especially during the festival season while measures to compensate those who will be immediately affected by declining US imports are being contemplated. MSMEs, which contribute nearly 45 per cent to US exports, and sectors highly exposed like gems and jewellery, textiles, auto parts and electronics, will need a cushion of easy credit, PLI payouts and other policy support which the government must firm up soon.
The sacrifices to protect the small dairy and agricultural farmers who make up nearly half the population becomes crucial as time alone might make even a capricious Trump, who is now busy threatening Cina with 200 per cent tariffs on magnets which the US badly needs, realises the folly of extreme protectionism that runs against the grain of modern global trade.
Far from moral posturing, the Trump braggadocio is, amid personal family business aggrandisement, all about trade blackmail. A peace deal in Ukraine may be the quickest route out or India may have to await inflationary factors, like the consumer having to pay more, to show up in the US economy. Standing up to Trump is a national cause now, regardless of cost.