India must avoid dependency for it leads to vulnerability

Our policy-making is more often than not for crisis management rather than having a long-term vision backed by a strategic action plan

- G CHANDRASHEKHAR

Trump's 50 percent tariff (basic 25% plus additional 25%) on Indian exports to the US has generated panic not only within the government circles but also in labour-intensive export sectors like textiles, gems and jewellery, leather goods and marine products.

Even as the India-USA Bilateral Trade Agreement negotiations seem bogged down because of market access challenges, the punitive additional tariff of 25% has come into effect, as Trump wants India to stop buying oil from Russia.

Fear of a sharp decline in exports to the US and the consequent—unaffordable—job losses at home has spurred the policymakers into damage-control mode. Suddenly, we are overwhelmed by events. Our dependency has become our vulnerability; we seem to be underprepared to ride out the storm.

Did we learn anything from Trump's previous stint (2017-2020) at the White House?

Looks like we have not.

It was not too far back; just six years ago in 2019, Trump imposed tariffs on India's steel and aluminium product imports and demanded greater market access for the US dairy items, agri-commodities, medical devices, etc. In addition, India was excluded from the Generalised System of Preferences (GSP) scheme.

India retaliated with customs duty on the US-origin goods, including lentils, apples, tree nuts (dry fruits) and so on. Even that time, the danger of Trump targeting India's labour-intensive goods (textiles, jewellery, seafood, and leather) was very real; fortunately, the issue did not precipitate.