Shashi Tharoor, a prominent leader of the Indian National Congress and Member of Parliament, has strongly criticized the recent decision by the United States, under the Trump administration, to impose a 50% tariff on Indian goods. This tariff hike, which includes an additional 25% levy on India's crude oil imports from Russia on top of an existing 25% tariff, has sparked concerns about its potential impact on India's economy and trade relations with the U.S..
Tharoor characterized the U.S. move as a "double standard," pointing out that while India faces these steep tariffs, China, which imports significantly more Russian oil, has been granted a 90-day reprieve from similar tariffs. He also highlighted that the U.S. continues to import items such as uranium and palladium from Russia. Tharoor questioned the fairness of singling out India, particularly when other nations are engaging in similar practices driven by their national interests. He stated that the decision was "not a particularly friendly gesture" from a country that India considered an ally.
The immediate impact of these tariffs, according to Tharoor, will be to make Indian goods more expensive and less competitive in the U.S. market. He expressed concern that American consumers may opt for cheaper alternatives from countries with lower tariffs, such as Vietnam, Indonesia, the Philippines, Bangladesh, and Pakistan. This could negatively affect India's exports to the U.S.. Economists have also warned of a potential hit to India's GDP.
Tharoor suggested that India should respond to these tariffs by considering reciprocal measures on American exports. He emphasized that India needs to reassess its trade relationships and explore diversifying its trade partners. He noted that India has a free trade agreement with the UK and is in discussions with the EU, suggesting alternative markets for Indian goods.
The Ministry of External Affairs (MEA) has also expressed its disapproval of the U.S. decision, calling it "unfair, unjustified, and unreasonable". The MEA reiterated that India's oil imports are based on market factors and are aimed at ensuring energy security for its 1.4 billion citizens. The ministry added that India would take all necessary actions to protect its interests.
Shashi Tharoor has called for negotiations with the U.S. government, but also asserted that if these negotiations fail to yield a positive outcome, India should not hesitate to impose reciprocal tariffs on U.S. imports. He noted that the average tariff on US imports to India is 17%, suggesting that the 50% tariff imposed by the U.S. is not merely reciprocal. Tharoor has urged Indian-origin Americans to advocate for fairness from their government, and stated that the Indian government should carefully assess the situation before responding.