
* India’s response to the latest U.S. tariffs has been measured, confident, and surprisingly unified. Just a day after former President Donald Trump imposed a sweeping 50% tariff on Indian goods and threatened secondary sanctions over India’s oil trade with Russia, Indian markets barely flinched. The Sensex ended slightly higher, signaling investor confidence in the country’s long-term economic resilience. From policymakers to private businesses, there is a growing belief in India that these tariffs are a negotiating tactic rather than a serious long-term policy.
* For the first time in years, Prime Minister Narendra Modi and opposition leader Rahul Gandhi have found common ground. Gandhi called Trump’s action “economic blackmail,” while Modi reaffirmed that India will never compromise on the interests of its farmers, fishermen, and livestock breeders. This bipartisan unity may actually strengthen India’s hand in the ongoing trade negotiations.
* Economically, while the tariffs sting, they aren’t devastating. According to Morgan Stanley, a full-scale tariff could shave off 60 basis points from India’s GDP—around $23 billion. In contrast, allowing American dairy access, one of the main U.S. demands, could cost India nearly ₹1.8 lakh crore, disproportionately affecting rural farmers. The decision, for India, is less about global pressure and more about domestic protection.
* The impact on specific sectors is real and growing. Electronics, gems and jewelry, pharmaceuticals, and refined petroleum products are all heavily reliant on exports to the U.S. A 50% duty will hit these industries hard, especially labor-heavy sectors like seafood and textiles, where billions in annual business may now be diverted to other countries. The risk extends beyond goods—foreign direct investment could decline due to protectionist signals from Washington.
* Despite these pressures, India’s economic foundation remains strong. Over 60% of the country’s GDP is driven by domestic consumption, giving it a critical buffer. Even the weakening of the Indian rupee might offset export losses in the long run, as a cheaper rupee makes Indian goods more competitive globally.
* India’s broader diplomatic strategy is also evolving. While it firmly rejects U.S. pressure on its Russian oil purchases, New Delhi continues to engage diplomatically—sending National Security Advisor Ajit Doval to Moscow and planning Modi’s first visit to China since 2018. At the same time, India has met several U.S. demands already, from reducing tariffs on specific American products to allowing Tesla’s market entry and rolling back the controversial ‘Google Tax’.
* Yet the game seems to be changing. Trump's focus has shifted from economic deficits to India’s strategic alignment with Russia. The imposed tariffs are now framed as a punishment for India's energy ties, not just trade imbalances. However, with Trump expected to meet both Putin and Zelenskyy soon, India may be right to adopt a wait-and-watch approach instead of rushing into concessions.
* India’s calibrated response—firm but not confrontational—is a sign of growing confidence on the global stage. While challenges from U.S. tariffs are serious, India’s diversified economy, strong domestic demand, and strategic alliances provide a solid foundation to withstand external shocks. For now, New Delhi is holding its line—and Trump may have underestimated that resolve.
By Utkrisht Pandey