Countdown begins: PM Modi has 19 days to dodge Trump’s 50% tariff shock. What are India’s options?

Source: Hindustan Times | Original Published At: 2025-08-08 05:19:15 UTC

Key Points

• US raises tariffs on Indian goods to 50% over India's Russian oil purchases
• India condemns the move as 'unfair' and explores alternative markets
• India-Brazil cooperation discussed to counter US tariffs
• Modi-Putin strategic partnership emphasized amid trade tensions
• Modi's upcoming China visit signals diplomatic realignment
• Tariff escalation threatens global supply chains and BRICS cooperation

India has suddenly found itself in the crosshairs of the US renewed bid to pressure Russia over the Ukraine conflict. On August 6, President Donald Trump announced a hike in US tariffs on Indian goods to 50 per cent from the existing 25 per cent, citing New Delhi’s continued purchases of Russian oil. India hit back, saying the move was “unfair” and “unjustified.” From left: Prime Minister Narendra Modi, US President Donald Trump and Russia’s President Vladimir Putin. Donald Trump on August 6 ordered an additional 25 per cent tariff on Indian goods over New Delhi’s continued purchase of Russian oil.(AFP)

Donald Trump’s penalty on India is intended to squeeze Moscow’s oil earnings and push President Vladimir Putin towards a ceasefire. The higher tariffs will take effect in 21 days, on August 27.

Also Read | India faces highest US tariff rate at 50%, Trump’s Russian oil reason stands on slippery ground

In a fresh comment on Thursday, Trump has ruled out the possibility of trade negotiations with India, until the issue of tariffs is resolved.

“No, not until we get it resolved,” Trump said in the Oval Office in response to a question on whether he expects increased trade negotiations with India since he has announced 50 per cent tariffs on the country.

Also Read | US tariffs impact: What will get expensive after Trump’s 50% move and who will pay?

On the current situation between India and the US, prominent Indian-American attorney Ravi Batra said “much more is at stake” amid Trump’s tariffs.

What’s next for India?

On Thursday, Dammu Ravi, secretary of economic relations in India’s external affairs ministry, told reporters that the US tariff hike “lacks logic”.

Also Read | ‘Maybe it’s his style’: Shashi Tharoor on Trump’s tariff move, says ‘govt may know more’

“This is a temporary aberration, a temporary problem that the country will face, but in course of time, we are confident that the world will find solutions,” he said.

He also signalled that India might seek to rebalance its global partnerships.

The Indian official said whenever any country faces tariff “walls”, it looks for new markets where it can trade with, and the Middle East, Latin America, Africa and South Asia are among the regions India will target.

“If the US becomes difficult to export to, you will automatically look at other opportunities,” he said.

PM Modi, Brazil’s President hold talks

On Thursday night, Prime Minister Narendra Modi and Brazil’s President Luiz Inácio Lula da Silva discussed “regional and global issues of mutual interest” in a phone call, as the Latin American nation’s leader maps out plans for BRICS nations to tackle the levies by Donald Trump.

Brazil, in its statement, said it and India are the most affected countries by Trump’s levies and that they needed to address the challenges of the current situation.

Dammu Ravi, in his statement to the media, said, “Like-minded countries will look for cooperation and economic engagement that will be mutually beneficial to all sides.”

Puvin held talks with India’s National Security Adviser Ajit Doval at the Kremlin on Thursday, with Russia’s state-run RIA news agency reporting that they had stressed their commitment to a “strategic partnership”.

External affairs minister Subrahmanyam Jaishankar is expected to visit Russia on a prior scheduled trip. Modi is expected to host Russian President Vladimir Putin in India later this year.

PM Modi’s China visit

Modi is also preparing for his first visit to China in over seven years, suggesting a potential diplomatic realignment amid growing tensions with Washington.

Officials in New Delhi told Bloomberg that Modi will attend a summit of the Beijing-led regional security grouping, the Shanghai Cooperation Organisation, and hold a bilateral meeting with President Xi Jinping on the sidelines. The SCO summit is scheduled to be held in Tianjin on August 31 and September 1.

China’s ambassador to New Delhi Xu Feihong gave Modi moral support over the tariffs on Wednesday.

“Give the bully an inch, he will take a mile,” Xu wrote on X over a quote from Chinese foreign minister Wang Yi denouncing the use of tariffs “as a weapon to suppress other countries.”

PM Modi vows ‘no compromise’ on farmers’ interests

Modi said on Thursday he will not compromise the interests of the country’s farmers even if he has to pay a heavy price, in his first comments after Trump’s tariffs shock.

“For us, our farmers’ welfare is supreme,” Modi said at an event in New Delhi.

“India will never compromise on the wellbeing of its farmers, dairy (sector) and fishermen. And I know personally I will have to pay a heavy price for it,” he said.

US import taxes are one part of a multilayered tariff strategy that includes national security-based sectoral tariffs on semiconductors, pharmaceuticals, autos, steel, aluminum, copper, lumber and other goods. Trump said on Wednesday that the microchip duties could reach 100%.

China is on a separate tariff track and will face a potential tariff increase on August 12 unless Trump approves an extension of a prior truce.

He has said he may impose additional tariffs on China’s purchases of Russian oil as he seeks to pressure Moscow into ending its war in Ukraine.