Trump tariffs Modi

Donald Trump’s stunning tariff hike of 50% on Indian exports to the US make Indian goods significantly more expensive, threatening to cripple key sectors of the Indian economy. Labor-intensive industries like textiles, gems and jewelry, information technology services and leather goods are particularly vulnerable. The tariffs could slash India’s exports to the US by a substantial margin, leading to a major economic setback. This action starkly contrasts with the deal offered to Pakistan, which saw its tariff rate reduced to 19% after striking a trade agreement with Washington. The contrasting treatment is a clear message about who is favored and who is not in Trump’s foreign policy calculus. For Modi, this is a profound diplomatic setback. His proactive and public courting of the US, especially during Trump’s first term, was a central pillar of his foreign policy. He was seen as the most pro-Western Indian leader in generations, which led to attracting American military interest as a counterbalance to China. The tariff decision shatters this carefully cultivated image of a global leader courted by world powers. It exposes the transactional nature of Trump’s alliances and his willingness to abandon partners in a split second. It means that in Trump’s world there are no permanent friends; only permanent interests. To navigate this breach, India is quietly reinstating its historic bond with Moscow: a relationship built by India’s first prime minister Jawaharlal Nehru to Indira Gandhi over decades and buttressed by defense cooperation, joint exercises and critical energy ties. This pivot may restore some strategic balance along its northern and western frontiers, but it also signals a retreat from the westward tilt that defined the current government’s tenure. Renewing ties with Russia could help India secure advanced military platforms and affordable energy supplies, but it offers limited relief on the economic front. European Union markets demand strict regulatory compliance and present sophisticated consumers, while South and Southeast Asian neighbours lack the scale to match US demand. Africa holds promise with infrastructure projects and growing populations, yet poor transportation networks and governance hurdles complicate deeper engagement. All the while, China continues expanding its commercial footprint globally and has signalled rapprochement with Washington. In this shifting landscape, India must diversify rapidly to safeguard growth. This policy turnaround is a bitter pill for Modi to swallow after his successful efforts to align with the West. While a closer relationship with Russia offers political and military support, it will not fully address India’s economic needs. India will need to search for alternative markets in Europe, Africa, and Asia to compensate for the lost access to the lucrative US market. This search will be complicated by China’s growing economic power. The international political landscape has become more complicated, and the outcome of these shifts remains uncertain as Trump continues to destabilize global trade with his aggressive economic policies. The Trump- tariff episode shines a harsh light on the precarious nature of modern geopolitics, where policy can pivot on a single tweet and strategic partnerships hinge on ephemeral bargains. For India’s leadership, the high tariff will require an urgent strategy overhaul that prioritises resilience, domestic industrial capacity and market diversification. As global economic nationalism intensifies, any nation overly reliant on a sole market risks exposure to abrupt policy swings that carry far-reaching and unpredictable consequences.