TARIFFS IN TURBULENT TIMES: BARRIERS, BARGAINS, AND THE BATTLE FOR GLOBAL TRADE

India is strategically placed to diversify exports towards dynamic, fast-growing markets, reducing reliance on a single partner. Its calm yet firm response to unfair US tariffs strengthens India's position in future negotiations. With multiple alternatives, India holds leverage to expand its global trade trajectory significantly in the coming times.

- Dr. S P Sharma

The 21st-century global economy is witnessing a renewed rise of tariffs as instruments of power and policy. Once regarded primarily as protective tools for domestic industries, tariffs have increasingly become bargaining chips in the larger arena of international politics. The recent US-India tariff conflict of 2025 is a live example of this trend. The USA's decision to impose a 50 percent duty on Indian goods has not only threatened to weaken India's export growth but also signalled a shift toward a more turbulent and transactional phase in global trade.

The US-India tariff conflict

The seeds of the present conflict were sown earlier in 2025 when the Trump administration announced a series of tariff increases against Indian imports. Initially, a baseline tariff of 10 percent was imposed in April, followed by reciprocal duties that raised the level to 25 percent by early August.

On August 27, however, US doubled down with another 25 percent increase, bringing the total tariff rate on most Indian goods to an unprecedented 50 percent and above. For comparison, Chinese goods faced only a 30 percent duty, while Vietnam and the Philippines were taxed at 20 percent. India, alongside Brazil, emerged as one of the hardest-hit partners in the recent phase of trump tariffs. The stated reason behind this escalation was India's continued purchase of discounted Russian oil. According to USA, these purchases indirectly helped finance Russia's war in Ukraine.

Economic consequences for India