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| Trump increase the tariff from 25 % to 50% |
In April 2025, when America imposed a 145% tariff on China in retaliation, China imposed a 125% tariff on America.
Later on when the table talks happened the tarif's were reduced to 30% by America and 10% by China. This happened because China imposed retaliation tariffs on America which caused problems for America also as they were importing heavily from China.
Now when India is in the same position as China where India is facing a 50% tariff from America. People are questioning why India is not responding to American tarif like China by imposing counter tarif ?.
Why doesn't India not impose tarif on America?
President Donald Trump has imposed Asia's highest tariff on India which is 50%
Earlier, Trump imposed a 25% tariff on India. After this, he increased the tariff by 25% making it a total of 50%. The reason given was displeasure over India buying Russian oil.
India also questioned this tariff by saying America and Europe are also buying uranium and fertilizer from Russia but they are only targeting India.
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| Rare Earth Minerals |
- Is there any loss for India
India imports raw material or Intermediate level goods from America which is essential for production in India. Retaliation by tariff can harm the market.
Like China, other countries don't have rare earth minerals which are required for making important components for tech and defence which can be used against America so they have to succumb to American pressure and bear the 10% tariff or more so there is very little chance of relief for India.
- Threat of Trump's Anger
Sujan Hazra, Chief Economist and Executive Director of Anand Rathi Wealth Limited, said in an interview with the English newspaper Mint, "The most disturbing thing is that India has been isolated. The US and its European allies are still trading with Russia, but only India has been targeted. In such a situation, it would not be right for India to give only a symbolic response in the form of retaliatory tariffs."
Some say India should also impose tariffs on America like China. But that would be beneficial for India as India imports much less than it exports and there are also chances of Trump getting angry and imposing more tariffs on India which will further impact the Indian economy.
- Impact on IT Sector
India's IT Sector is also dependent on America as it imports its IT Services to America which is calculated to be in billions
In previous year India's total IT service and Software import was around $200 billions out of which more than half i.e 54.7% is with America which is calculated to be $109 billions
If India impose retaliatory tariff and America also inc the tariff then it will not be in India's favor.
What if India stops buying oil from Russia?
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| Import of Russian oil to India |
India and Russia have a long-standing relationship between them dating back to the Soviet era. Over time the two countries have strengthened the economy and trade.
India-Russia have continued to grow trade relations in the post Soviet era. While it has grown from $1.4 billion to $68.7 billion from 1995 to previous financial year 24-25.
The two countries have also strengthened cooperation in the field of investment. Indian companies have invested in Russia's oil-gas, pharmaceutical and IT sectors, while Russian companies have invested in India's energy, infrastructure and manufacturing sectors
What if India stops buying oil from Russia will America change its tariff on India?
Jayant Dasgupta an Ex Ambassador of WTO believes that if India stops buying oil Trump will only change his goalposts.
He writes, "Trump did not impose any tariff on Europe and China, although both of them are the biggest energy buyers of Russia. Even if India stops buying Russian oil, the conditions could change to stopping the purchase of Russian defense equipment, exiting BRICS and not trading in the currency of other countries.”
What can India do?
India needs to strengthen its economy against the tariff and look other countries for alternate trade market
What if India files an appeal in the World Trade Organisation(WTO)?
Jayant Dasgupta explains, "WTO has a two-tier system of resolving disputes. At the second level, appeals are decided by three members of a team (Appeal Body) of seven permanent members. These seven members are selected with the consent of all countries. But Trump stopped the appointment of new members in his first term. There is no member in this body since 2019. Therefore, this system is no longer working. In such a situation, filing a case against America will be just a formality."