‘Unilateral, illegal, unfair’: Donald Trump’s 25% tariff on India draws strong reactions
A recent study by the State Bank of India (SBI) had warned that a 20% flat tariff on Indian exports could lead to a 50 basis points (0.5%) loss to India’s GDP. The report also estimated that every 1% rise in tariffs could result in a 0.5% decline in export volumes, highlighting the adverse effect of elevated trade barriers on the country’s economic growth.
Also Read: Trump says goods from India will face 25% tariff from Aug 1 and an additional penalty for non tariff barriers
In a statement, Trump criticised India’s trade regime, stating, “While India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world, and they have the most strenuous and obnoxious non-monetary trade barriers of any country.”
Jayant Dasgupta, former Envoy to the WTO, told CNBC-TV18 that a 25% tariff is not entirely unexpected given Trump’s previous patterns. He pointed to a bill proposed by US lawmakers that allows the President to impose tariffs of up to 500% on countries importing oil from Russia. He said Trump may consider duties of up to 100% in such cases. Dasgupta added that while India is not entirely dependent on Russian oil, alternatives remain available.
He also remarked that earlier informal commitments to purchase more oil and defence equipment from the US had not prevented the tariff action. However, he noted that Trump often scales down from his initial statements and negotiations are likely to continue.
SC Garg, former Finance Secretary, said that India had tried to accommodate US concerns by importing American energy despite high transportation costs. He added that applying the same logic to defence purchases is unreasonable. Garg warned that high penalty tariffs could destroy India’s export surplus with the US. He called the US approach “sheer blackmail” and said such a regime is incompatible with fair trade practices.
Ajay Sahai, Director General, Federation of Indian Export Organisations, expressed disappointment, stating that while a 25% tariff was within expectations, the lack of clarity on the penalty component makes it difficult for exporters to assess the impact. He said Indian exporters may absorb losses temporarily in hopes of a future Bilateral Trade Agreement (BTA) that could offer relief.
Raymond Vickery, Senior Associate at the Centre for Strategic and International Studies, described the move as unfortunate, saying it undermines decades of bipartisan progress in US-India relations. He criticised Trump’s transactional approach and urged India to seize the moment to show global leadership, especially in negotiations.
Anjali Prasad, Former Ambassador to the WTO, questioned the legality of unilateral tariff penalties. She said such actions breach multilateral trade norms and risk creating chaos in the global trading system. She called on India to consider retaliation and take a leadership stance in defending international trade rules.
Also Read: Trump Tariffs LIVE Updates: Trump says India will pay a 25% tariff, and penalty for buying oil, weapons from Russia
