PM modi delivered a powerful response to the United States’ decision to double tariffs on Indian imports from 25% to 50%, pledging that India will never compromise on the interests of its farmers, fishermen, and dairy producers. Addressing the MS Swaminathan Centenary International Conference, he emphasized:
“Interests of farmers are a top national priority. India will never compromise … I know we will have to pay a heavy price for it—personally, I’m ready. India is ready for it.”
U.S. Escalates Trade Tensions with India
On August 6–7, 2025, President Donald Trump announced an additional 25% tariff on Indian goods—on top of the 25% “reciprocal tariff” already in effect—raising total duties to 50% for many items. The new tariffs target India’s continued import of Russian oil, cited as a geopolitical concern. The extra tariffs are slated to take effect on August 27, 2025
Reports indicate that up to 55% of India’s exports to the U.S. may face increased duties, with sectors like textiles, jewelry, and footwear particularly vulnerable to severe export losses.
India’s Official Response: A Five‑Point Retort
India’s Ministry of External Affairs issued a robust statement condemning the tariffs as “unfair, unjustified and unreasonable”, defending its energy imports from Russia and vowing to take all necessary steps to safeguard national interest.
The MEA laid out a five-point rebuttal, emphasizing:
- The targeting of India’s energy imports from Russia
- Sovereign energy-security concerns of a 1.4 billion‑strong nation
- Selective targeting despite similar actions by other countries
- Rejection of the tariff decision
- A firm warning of protective action
Union Commerce Minister Piyush Goyal reiterated that the government is steadfast in safeguarding farmers, workers, and entrepreneurs. Opposition leaders like Tejashwi Yadav and Mallikarjun Kharge criticized the government’s measured tone, arguing that stronger political countermeasures were needed.
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PM Modi’s Strategic Trade Square-Off: Strengthening Farmers, Defying Pressure
PM Modi’s speech underscores a conscious strategy: prioritizing domestic livelihoods over trade concessions, even if it means accepting diplomatic costs. India has declined to open its agricultural and dairy sectors—the key sticking points in negotiations with the U.S.—citing protection of its rural economy.
While Trump’s administration has pressured New Delhi to cut tariffs on U.S. imports—including corn, soy, and cotton—India has held firm. Modi’s open acknowledgement of facing the fallout personally bolsters his nationalist authority with voters.
Broader Impact: Trade Fallout and Diplomatic Fracture
- The failed India–U.S. trade talks, despite five official rounds and Indian concessions on U.S. industrial and energy imports, collapsed due to misaligned expectations and communication breakdowns.
- Some analysts warn of slower GDP growth, with lost export volumes and investor hesitation potentially shrinking India’s growth by ~0.4% in FY 2026.
- Foreign policy experts describe this moment as the lowest point in bilateral U.S.–India relations in years, noting Trump’s pivot toward Pakistan and increasing personal tension between the two leaders.
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Looking Ahead: Negotiations and National Resilience
With a U.S. delegation reportedly headed to Delhi in late August, India remains open to revived trade dialogue, but without sacrificing its agricultural safeguards. Modi’s position reflects a balancing act—projecting firmness internationally while preserving domestic credibility.
India’s resolve signals a new chapter in trade diplomacy: fiercely protecting rural interests under pressure, and navigating global economic tensions without surrendering sovereignty.
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