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India facing tough choices in responding to steep Trump tariffs: GTRI
Aug-18-2025

The Global Trade Research Initiative (GTRI) has said that India is facing tough choices in responding to steep US tariffs - from negotiating or retaliating to diversifying export markets or offering trade concessions like ending Russian oil imports - but each option carries its own mix of benefits and risks.

It said that India marks its Independence Day this year under the shadow of a bruising trade confrontation with Washington. The Trump administration's decision to slap a 50 per cent country-specific tariff on most Indian goods, on top of existing most favoured nation duties, has thrust India into a strategic dilemma that could reshape its trade, energy, and diplomatic positioning.

GTRI Founder Ajay Srivastava said ‘For New Delhi, the choices ahead are stark - negotiate, retaliate, diversify markets, or trade concessions such as ending purchases of Russian oil for tariff relief. Each option carries a different mix of gains and risks.’ He added that India will require structural reforms and aggressive trade diplomacy to absorb the high tariffs and diversify the country's exports to Europe, ASEAN, Africa, the Middle East, and Latin America.

He stated ‘Gains in the first two years might recover only $1015 billion of the $50 billion lost.’ If US tariffs would raise consumer prices and unemployment in America, he said, domestic political pressure could force the Trump administration a cut to around 15 per cent for all countries. He said India's best role here is to quietly highlight the tariffs' cost to American voters.’ He added that in an era when economic power is used as a weapon, survival isn't about avoiding confrontation.


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