India Must Not Fall Into the Tariff Trap That Donald Trump Has Laid

New Delhi Mustn't Use Tariffs to Retaliate as the Damage Done Will Outweigh Any Near-Term Gains

- KAUSHIK BASU

Economic relations between India and the US have been thrown into disarray after US President Donald Trump announced a sweeping 50% import tariff on nearly all Indian imports, with the exception of some electronic items and certain pharmaceutical products. The move places India among the five most heavily targeted countries under Trump's tariff regime, alongside Brazil (50%), Syria (41%), Laos (40%) and Myanmar (40%).

The announcement caught Indian policymakers off guard, particularly given Prime Minister Narendra Modi's apparent support for Trump's re-election campaign. The White House's harsh statement, framing the move as punishment for India's purchases of Russian oil, has only added to the confusion. As the Wall Street Journal recently noted, this reasoning does not hold up, since China—the largest buyer of Russian oil—has not been penalized for its purchases.

So, what explains Trump's decision? Paradoxically, India's policy of siding with Trump may have made India easier to take for granted, to the point that even a minor departure from Trump's preferences is treated as unacceptable.