Congress MP Shashi Tharoor warned that the 25% tariff announced by former US President Donald Trump could deeply harm India’s trade with America. Speaking on Thursday, Tharoor said the move could have severe economic consequences.
“It’s a very serious matter for us… 25, plus an unspecified penalty for our buying oil and gas from Russia, it could take it up to 35–45… There’s even talk of a 100% penalty, which will destroy our trade with America,” Tharoor told ANI. He explained that ongoing trade talks might bring the numbers down, but if not, Indian exports would suffer. “America is a very big market for us,” he added.
India’s needs must be respected, says Tharoor
Tharoor also said that the US must take India’s needs into account during negotiations. “On the other hand, if their demands are completely unreasonable, our negotiators have every right to resist… America has to understand our needs as well,” he stated.
He pointed out that Indian tariffs on American products are not excessive. “It’s about 17% average. American goods are not priced competitively enough to sell in the Indian market,” Tharoor said.
India ready to explore other trade options
Calling the India-US trade talks a “challenging negotiation,” Tharoor said India is also in talks with other global partners. “We are negotiating with many countries. The US is not the only negotiation. We have ongoing negotiations with the EU, we already concluded a deal with the UK, and we are talking with other countries also,” he said.
He added that India may shift focus to other markets if the US remains inflexible. “If we can’t compete in America, we may have to diversify our markets outside of America. We are not out of options.”
He highlighted India’s strong domestic base. “That is the strength of India; we are not a totally export-dependent economy like China. We have a good and strong domestic market,” he explained. “We must give strong support to our negotiators to find the best deal possible. If a good deal is not possible, we may have to walk away,” Tharoor concluded.
Chidambaram criticises Modi government, calls US move a WTO violation
Senior Congress leader and former Home Minister P. Chidambaram also responded strongly. He criticised the Modi government while warning that the tariffs and penalties could hurt Indian trade. He also said the measures violate international trade laws.
In a post on X (formerly Twitter), Chidambaram wrote, "The 25 per cent tariff on all Indian exports to the United States PLUS penalty for buying Russian oil is a big blow to India's trade with the U.S. 'Dosti' is no substitute for diplomacy and painstaking negotiations. The tariff imposed by the U.S. is a clear violation of the WTO rules."
Trump explains move, blames India’s high trade barriers
On his Truth Social platform, Donald Trump confirmed that India will face 25% tariffs from August 1. He said the penalties will also apply due to India’s continued purchase of Russian oil.
In his post, Trump wrote, “Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country.”
He continued, “Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD!”
“INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST 1st. THANK YOU FOR YOUR ATTENTION TO THIS MATTER. MAGA!” Trump added.
India responds cautiously
India's government acknowledged Trump’s remarks and said it is examining the matter. In an official response, the government stated, “India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective.”