Congress Criticizes Trump's Tariff Announcement on Indian Goods
Congress Reacts to Trump's Tariff Decision
On Wednesday, the Congress party expressed strong disapproval of President Donald Trump's declaration regarding a 25% tariff on imports from India, set to take effect on August 1. They labeled this move a “catastrophic failure of foreign policy.”
The party stated on social media that “an entire nation suffers from the consequences of one man’s ‘Friendship’.”
Congress leader Jairam Ramesh remarked that the previous praise exchanged between Trump and Prime Minister Modi has proven to be ineffective.
He further criticized Modi for failing to counter Trump's assertions about facilitating a ceasefire agreement between India and Pakistan in May.
Ramesh stated, “Mr. Modi believed that remaining silent on the insults would lead to special treatment from President Trump. Clearly, that has NOT occurred.”
Supriya Shrinate, head of the party’s social media division, warned that the tariffs would have dire consequences for India's economy, noting that this situation arises despite Modi's efforts to cultivate a positive relationship with Trump.
She emphasized, “This is a clear indication of how the BJP government and the Prime Minister have compromised India’s national interest.”
Industry Concerns Over Increased Uncertainty
The Federation of Indian Chambers of Commerce and Industry (FICCI) expressed that the US's decision would heighten uncertainty for Indian exporters in the short term. Senior Vice President Anant Goenka expressed hope that this situation would be temporary and that both nations could reach a mutually beneficial trade agreement soon.
FICCI remains optimistic that discussions between India and the United States will progress towards a trade deal, aiming for completion by September or October. They expressed hope that the final agreement would yield positive outcomes for both countries.
The Confederation of Indian Textile Industry warned that the new US tariff would pose significant challenges for India's textile sector.
Chairperson Rakesh Mehra stated, “The new tariff rate will undoubtedly test the determination and resilience of India’s textile and apparel exporters, as we will lose a significant duty differential advantage compared to many other countries, except Bangladesh, with whom we compete for a larger share of the US market.”
Mehra also pointed out that the ambiguity surrounding the “penalty” amount adds to the uncertainty faced by businesses.
Government's Response to Tariff Announcement
The Union Ministry of Commerce and Industry announced on Wednesday evening that it is assessing the implications of the US's decision and will take all necessary measures to protect national interests.
The ministry stated, “India and the US have been engaged in negotiations to finalize a fair, balanced, and mutually beneficial bilateral trade agreement over the past few months. We remain committed to that objective.”
Details of the US Tariff
Trump cited “far too high” tariffs on American goods, non-trade barriers, and the procurement of arms from Russia as reasons for imposing the 25% tariffs on India.
He also mentioned that India would incur a “penalty” for purchasing a significant portion of its military equipment from Russia, although he did not specify the amount.
The United States plans to impose “reciprocal” tariffs on numerous countries that have not established separate trade agreements with it by August 1.
Earlier in April, Trump had announced higher tariffs but later reduced them to 10% to allow for negotiations. Despite the extended deadline, only a few deals have been secured.
On Monday, Trump indicated that he would likely introduce a global baseline tariff ranging from 15% to 20% for countries that have not negotiated trade agreements with his administration.
On June 27, Trump suggested that New Delhi could soon sign a “very big” trade deal with Washington. The White House indicated on July 2 that the deal was close to being finalized and would be announced shortly.
An Indian delegation led by Union Commerce Minister Piyush Goyal visited the US in May to negotiate the agreement, followed by a US negotiating team visiting India for a week in June.