Following the U.S. imposition of a steep 50 percent tariff on Indian goods, Washington-based South Asia analyst Michael Kugelman stressed that India must respond firmly and assert that it will not be intimidated by the strong stance of President Donald Trump. Kugelman highlighted that India's competitors in textile exports, such as Bangladesh, Pakistan, and Vietnam, benefit from lower tariffs, potentially disadvantaging India unless it adapts strategically.

He suggested that India is likely already considering alternative means to circumvent tariff impacts and underscored the importance of New Delhi aggressively pursuing new trade agreements with key markets like the European Union to offset the damage caused by the tariffs.

The tariffs, a response to India's continued purchase of Russian oil despite U.S. sanctions, mark the highest U.S. tariffs on any trading partner, severely affecting Indian exports worth approximately $87 billion annually to the U.S., including textiles, gems, jewellery, leather, and auto components.

These tariffs have raised concerns about reduced competitiveness and potential GDP growth slowdown for India, with estimates suggesting possible declines in export and economic performance. Indian officials and industry stakeholders, while critical of the tariffs as “unfair” and “unjustified,” remain confident in their long-term resilience and continue to engage in dialogue with the U.S., as trade talks are planned to proceed despite rising tensions.

Kugelman also commented on regional security issues alongside trade matters. He addressed statements made by Pakistan Army Chief Asim Munir regarding nuclear threats toward India, noting the comments were made in a private context and reflect Islamabad’s anxieties amid escalating tensions, specifically citing India's suspension of the Indus Waters Treaty as a non-military punitive measure. Munir’s remarks reassert Pakistan's longstanding rejection of a "No First Use" nuclear policy, signalling continued volatility in strategic stability in South Asia.

Kugelman’s analysis advocates a dual-focused Indian strategy: diplomatically standing firm against economic coercion by the U.S. tariffs and proactively expanding trade partnerships beyond the U.S. to sustain export growth, while navigating heightened regional security challenges.

This approach aims to maintain India's sovereign decision-making and economic security in a complex geopolitical environment.

Based On ANI Report