In conclusion, India will continue to be resolute in its commitment to protecting the interests of its farmers, livestock rearers, and fisherfolk. This commitment holds firm, even under mounting pressure from the United States. This is why Indian Prime Minister Narendra Modi has defiantly declared that he is willing to “pay a very heavy price” for resisting American pressure on India’s trade policies. This has ranged from opposing the import of genetically modified (GM) crops to ensuring duty-free access for U.S. agricultural products.
It was the U.S. that escalated the situation first by slapping high 25% punitive tariff on Indian products. They called this action a slap on the wrist for India’s ongoing importation of Russian crude oil. This decision has sparked an unprecedented storm of opposition from India. The country’s foreign ministry has condemned the tariff as being “unfair, unjustified and unreasonable.”
Modi emphasized that India will not compromise on its agricultural interests, stating, “India will never compromise on the interests of its farmers, livestock rearers and fisherfolk.” He further elaborated on the personal stakes involved, affirming, “And I know that I will personally have to pay a very heavy price for this, but I am ready.”
Yet thus far, India has held very hard lines against U.S. requests for the import of GM crops, including negotiations, as “non-negotiable on principle.” The U.S. is powerfully advocating for these imports. This initiative is a piece of a larger U.S. agenda to obtain duty-free access for American agricultural and dairy products to the Indian market. Above all, India’s national interest should be supreme—Mallikarjun Kharge, Leader of main opposition Indian National Congress party. He remarked, “Any nation that arbitrarily penalises India for our time-tested policy of strategic autonomy … doesn’t understand the steel frame India is made of.”
Trade tensions have reached an all-time low. U.S. tariffs threaten to hit nearly 55% of Indian shipments to its largest export market. SC Ralhan, the president of the Federation of Indian Export Organisations, says these tariffs would disproportionately affect large, vital sectors. Industries like textiles, RMG, auto-components, steel and gems will be hit the hardest. Ralhan stated, “Nearly 55% of our shipments to the US will be affected.”
We asked experts to comment on what form India’s response should take. Shashi Tharoor, an MP from the ruling Congress party in opposition’s stronghold, suggested a radical plan. His recommendation included considering reciprocal tariffs on U.S. exports to India in response to trade barriers currently faced. At the time, he said these measures could be an efficient means to offset the negative economic effects of U.S. tariffs.
Senior associate at the Centre for Social and Economic Progress, Prerna Prabhakar, had some great testimony to add. She recommended that India continue to lower its tariffs to improve its integration into global markets. She warned, “If the 50% tariffs do come into play some sectors are going to have a very, very hard time.”
The wider implications of these trade tensions have certainly not escaped the attention of international relations scholar. Walter Ladwig, a senior lecturer at King’s College London, cited old complications in the bilateral trade relationship between India and the U.S. He described the impasse as “the most grave public discord in decades” and warned that “neither party wins from a split.” As for India, he wants it to keep defending its purchases of Russian oil. This latest move, while further emphasizing the country’s pursuit of sovereignty and energy security, seeks to find a path toward reducing increasing tensions.
As India and America find their way through this global tempest, Modi’s government will have to make some monumental trade and international relations choices. Things got serious last August, when former U.S. President Donald Trump announced a new round of 50% tariffs. These tariffs will go into effect on August 27 unless something can be worked out before then.