The recent imposition of a 50% tariff on Indian goods by the United States, under the direction of former US President Donald Trump, has triggered strong reactions in India. Trinamool Congress (TMC) leader Abhishek Banerjee has led the charge, calling for a firm response from India and denouncing the situation as a "diplomatic failure".
Banerjee, the newly appointed TMC Lok Sabha leader, didn't mince words, criticizing those within the Indian government who had previously campaigned for Trump and fostered close ties with him. He argued that these individuals should be held accountable for the current predicament. "Those who click photographs with (US President) Donald Trump and campaigned for him in Texas should answer why such steep tariffs have been imposed," Banerjee stated. He also pointed out the irony of the situation, noting that the government, which once boasted of a "56-inch chest," is now facing "red eyes" from other countries.
The TMC leader expressed deep concerns about the potential ramifications of the tariffs on the Indian economy. He warned of significant job losses, particularly in key sectors like IT, pharmaceuticals, and textiles. Additionally, he anticipated a decline in exports, further exacerbating the economic challenges. Banerjee didn't hold back in his assessment of the current economic climate, stating that the "economy is now in the ICU". He attributed this situation to the Modi government's "failed foreign policy".
Banerjee also condemned Trump's remarks about the Indian economy, where Trump had said that the Indian economy is "dead". While disagreeing with the assessment that the Indian economy is dead, Banerjee conceded that it is in a critical state. He emphasized that the Indian economy survives "on the love and affection of 140 crore Indians".
Other opposition leaders have echoed Banerjee's sentiments, with Congress leader Rahul Gandhi describing Trump's tariffs as "economic blackmail". Shashi Tharoor, another Congress MP, urged the Indian government to retaliate by raising tariffs on American goods. He questioned why India should maintain its current 17% average tariff on US goods, suggesting it should be raised to 50% in response.
In response to the tariffs, India has accused the US of "unfair, unjustified and unreasonable" actions. New Delhi has emphasized that its import policies, including the purchase of Russian oil, are guided by market factors and aimed at ensuring energy security for its 1.4 billion citizens. The Ministry of External Affairs stated that it was "extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest".
The Indian government has declared that it will take "all actions necessary to protect national interests". While the specific measures remain to be seen, India is reportedly considering several options, including negotiating with the US, reducing reliance on Russian oil, and strengthening ties with BRICS nations. Some officials are hopeful that behind-the-scenes discussions can ease tensions, with a US trade delegation expected to visit New Delhi. However, India is also prepared to "pay a heavy price" to protect its farmers, dairy sector, and fishermen.
Analysts predict that the tariffs could have a significant impact on India's GDP growth, potentially causing a decline of up to 1%. The move could make Indian goods less competitive in the US market, which is India's largest export destination. Sectors that are labor-intensive could be particularly affected, potentially forcing India to seek alternative markets.
The situation remains fluid, and the coming weeks will be crucial in determining the long-term impact of the tariffs and the nature of India's response.
