TRUMP TARIFF VS GST RATE CUT: THE BATTLE OVER INDIAN POCKETS

During the British colonial rule in India, the capital city of Delhi was infested by reptiles of which king cobra was the deadliest. To tackle the risk, the British devised a bounty program.

- SHWETA SHALINI

They offered money for every cobra caught and ended up creating a perverse incentive. The strategy worked exceedingly well and local population teamed up to earn a quick buck by capturing snakes. The number of cobras in the city rapidly dwindled. However, the initial success backfired later. The British incentive program had unwittingly attracted enterprising people who began breeding the cobras. Sensing that cobra bills are rising again because of monetary incentive to breed them, British government quickly called off the program. It made the bad situation worse.

The breeders simply let off the cobras as the previously valuable cobras were now worth nothing. The abandoned cobras became a nightmare. The “cobra effect” in English lexicon is a situation where an attempted solution to a problem actually makes the problem worse.

In the 21st century, the shortsighted foreign policy of Indian allies are leading to cobra effect on a grander scale. In August 2025, the American government imposed tariffs on India seeking to deter Indian purchase of Russian oil. By levying a 50% tariff, the US threatened Indian exports of over $80 billion. Exemptions covered about $28.4 billion leaving more than $50 billion trade susceptible to losses. The US didn't imagine that a visionary enterprising government is in power in India. Instead of cowering under pressure or reducing Russian oil, India increased its purchase orders attempting to plug the huge foreign exchange hole. In