We Need a Multipronged Plan to Sail Through This New Era of Trade

Diversification will help, but we must also find space for negotiation with the US in win-win areas

- SANJAY CHADHA

In the wake of the US tariff onslaught, India recently inked the terms of reference to launch free trade agreement talks with the Eurasian Economic Union, a $6.5 trillion economic bloc. Diversification in pursuit of new markets such as Central Asia is a necessary hedge against America's protectionist turn. But this does not obviate the need for tangible parallel negotiations with Washington in areas of strategic interest in a way that shields our domestic production in important sectors.

What began as a set of 'reciprocal' global tariffs in seeming pursuit of trade parity has morphed into a geo-economic play, with India now facing a combined 50% hit—25% baseline tariff plus another 25% penalty linked to our oil imports from Russia.

The fallout strikes at the heart of India's export engine. In garments and textiles, where margins are wafer thin, even a modest tariff bump-up pushes orders to Vietnam or Bangladesh. In gems and jewellery, consumer demand is so price-sensitive that higher duties can instantly choke billions in trade, triggering a cascade of job losses.