THE UNSPOKEN TRUTH OF THE US TARIFF

Tension in the US-India trade relations rose to its peak when United States President Donald Trump announced India a “dead economy” and declared a 25% additional tariff on Indian imports, making the total around 50%. This was not just an economic decision—it was an important turn in the coming years to decide the direction of America-India relations. Despite this rigorous stance, the US exempted some of India’s major export areas from tariffs—including medicines (tablets, injections, and syrup), drug components (API), electronics and ICT products (semiconductors, smartphones, SSDs, and computers), and petroleum products (crude oil, LNG, sophisticated fuel, electricity, and coal). This partial discount is a clear indication that the American economy is directly dependent on India in many important sectors, and complete trade isolation is not a practical option for it.

This contradiction deepens when we see that despite restrictions and strict rhetoric, large economies are trading with Russia on scale. The European Union (EU) imports about 19% (0.2–0.4 million tons) from Russia and about 18 million tons of liquefied natural gas, as well as 8 million tons of crude oil every year, priced at more than €18.7 billion. The US bought 3.5 million tons of fertilizer for $1.3 billion from Russia in 2024, 435 tons of uranium (about $210 million), and 1.1 million tons of oil reflected in India. This clearly indicates that in global politics, the ban and rhetoric occur on the one hand, while real economic behaviour goes on the other side.

In FY 2025, the US imported around $ 86.5 billion from India, giving India a $ 40 billion trade surplus. This surplus was beneficial for both countries. American companies have billions of dollars from outsourced IT and BPO services from India, of 60% of Indian professionals. 2.75 lakh Indian students’ study in the US, giving the US economy $ 7.7 billion annually. 50% of generic medicines imported from India saved the US $ 219 billion in 2022. In the digital field, Meta earned an advertisement of Rs 16,189 crore in FY22 in India and Rs 22,730 crore in FY24. Amazon India unit’s fY22 revenue was Rs 21,633 crore. The partnership with India under the “Chips and Science Act” has reduced America’s China dependence.

In the Ukraine War, India abstained from standing in favor of America, which is part of its diplomacy and sovereignty, making Washington uncomfortable. India’s defense self -reliance is increasing rapidly - indigenous defence production in 2023–24 has reached Rs 1.27 lakh crore and defence exports to Rs 21,000 crore. This has made it difficult to tie India in the American weapon market. Also, the US is also under pressure to open India’s agriculture and dairy markets.

American pressure is not only the market access, but a major geopolitical strategy. India, with the world’s largest milk producers, 230 million tonnes of production, is supported by 8 crore rural families. American dairy companies want to enter the Indian market without a ban, which pose a serious threat to rural employment and income. 10% import hike may cause an annual loss of Rs 40,000- Rs 50,000 crore to farmers. The US industrial model uses hormones and antibiotics, which is risky for health, while India’s decentralized, hormone-free, vegetarian models employ villagers. Changing this durable model with foreign factory-framed imports will be harmful to both rural economy and health.

If genetically modified seeds are openly approved, the cost of small farmers will increase, they will depend on multinational companies and traditional varieties can be finished. It is estimated that with the implementation of GM seed in 25% area, the seed cost may increase Rs 12,000 - Rs 15,000 crore, while the profit will be uncertain. India has old experiences against it - 1998 American wheat dispute, 2010–12 BT brinjal dispute, and 2020– 21 peasant movement, in which farmers and scientists protested against the influence of foreign investment and laws.

History suggests that America’s pressure is not new, but part of the old strategy-the restrictions after the Pokhran-II, the restriction of missile technology, and more than $ 33 billion military aids to Pakistan are examples of this. The current tariff pressure is also a new form of this pattern.

India’s attitude is clear - instead of rejecting recycling, he wants to adopt according to its scale, experience and sovereignty. In the last 15 years, 41.5 crore people have come out of poverty, more than 30 million people have been using digital public means like UPI, and India’s dairy industry employs 8 crore rural families with 230 million tonnes of production. India relies on local, durable models and traditional farming, not GM seeds and factory farming.

According to strong domestic market (140 crore) and IMF, India is the fastest growing major economy in the world with 6.8% GDP growth in 2025. In such a situation, India should have flexibility in partnerships, but should not compromise on policy self -sufficiency and domestic security, because economic strength will be the basis of diplomatic strength in the coming decade.

THE VIEWS EXPRESSED BY THE AUTHOR ARE PERSONAL

Gajendra Singh, The writer is Social Thinker & Development Professional