The imposition of high tariff rates by the United States on goods from various countries such as China, India, and several European and Asian nations has triggered strong counter-responses. India, in particular, has taken visionary measures to safeguard its economic interests. These actions highlight what many view as the protectionist and unilateral leadership approach of former US President Donald Trump.
Prime Minister Narendra Modi has responded in a firm and strategic manner, advocating for fair and transparent trade practices. His approach has focused on creating balanced and effective business programs and strengthening global trade partnerships, while mitigating the negative impacts of US tariffs on India’s trade ecosystem.
Assessing the Background of the Situation
The United States announced plans to impose steep tariffs and additional duties—reportedly exceeding 50%—on several Indian goods. This move adversely affected India’s export growth, especially in traditional sectors such as textiles, gems and jewellery, and leather goods.
The US justified these tariffs on products like steel and aluminium by citing national security concerns. Additionally, geopolitical tensions—particularly regarding India’s close relations with Russia—have contributed to trade frictions. In response, India imposed retaliatory tariffs on selected US products, escalating the dispute into a broader trade standoff.
India’s Strategic Response
Prime Minister Modi’s government adopted a multi-dimensional and proactive strategy to counter these challenges:
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Diversifying Trade Partners: India intensified efforts to strengthen trade relations with alternative markets such as Japan, China, and the European Union, reducing over-dependence on the US market.
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Promoting Domestic Industry: Initiatives like “Make in India” were reinforced to boost domestic manufacturing and reduce reliance on imports, emphasizing self-reliance and industrial resilience.
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Engagement with the WTO: Instead of escalating conflicts through political rhetoric, India approached the World Trade Organization (WTO), arguing that US tariffs violated global trade norms and principles.
India’s focus on strengthening domestic capabilities also highlights the importance of quality education and leadership development. Institutions offering management education, such as a management college in Jaipur play a crucial role in preparing future business leaders for global trade challenges.
Impact on Trade Relations
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Effect on US Exports: India’s retaliatory tariffs impacted US exports, particularly in agriculture and pharmaceuticals, signaling India’s growing influence in global markets.
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Tense Bilateral Relations: The tariff dispute strained US–India trade relations, although negotiations continued to seek a resolution.
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Employment Concerns: Millions of jobs in sectors such as textiles, leather, and jewellery faced potential risks due to reduced export demand.
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Trade Imbalance: Previously, nearly one-fifth of India’s total exports were absorbed by the US, a share that has since declined.
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Shift in Export Markets: Indian exporters increasingly turned toward markets like China, the UAE, Spain, and Bangladesh.
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Pressure on MSMEs: Small and medium-sized enterprises faced declining competitiveness due to rising costs associated with high tariffs.
Strategic Interpretations
Policy advisors and international committees, including voices linked to NATO, warned that new US tariff policies on Indian imports could severely damage US–India relations, which had evolved through bipartisan cooperation. These measures were described as unilateral and not reflective of broader US public or institutional sentiment.
Despite the imposition of tariffs reportedly reaching 50% on selected Indian exports such as jewellery, shrimp, and textiles, India refrained from making immediate concessions. Instead, it focused on strengthening diplomatic and trade ties with global leaders including Russia’s President Vladimir Putin, China’s President Xi Jinping, and the European Union.
By September 2025, renewed negotiations indicated that India’s consistent and strategic approach may have influenced diplomatic dialogue, positioning the country as a more assertive and confident player in global trade.
Modi’s Political Efforts
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Engagement with Global Leaders: Prime Minister Modi discussed trade concerns with leaders from Japan, Germany, and France, seeking collective support against protectionist trade policies.
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Raising Concerns at International Forums: India highlighted the issue of unfair tariffs at global platforms, reinforcing its stance on equitable trade practices.
India’s 30% Tariff on US Peas: Implications for Global Trade
India imposed a 30% import tariff on US peas and other pulse crops, effective from November 1, 2025, ending the previous duty-free access. As India accounts for nearly 27% of global pulse consumption, this decision holds significant global trade implications. The move aimed to protect domestic farmers, stabilize prices, and rebalance trade negotiations with the US. However, American lawmakers from pulse-producing states such as North Dakota and Montana criticized the tariff, urging President Trump to raise the issue with Prime Minister Modi.
Conclusion
The tariff counter-reaction underscores India’s increasing assertiveness in defending its trade interests. Prime Minister Modi’s strategic and visionary leadership reflects India’s willingness to challenge protectionist policies while advocating fair global trade. If the US continues efforts to suppress India’s trade, India may further reduce its dependence on the US market by diversifying imports and exports. Following the imposition of high tariffs, calls to boycott American brands such as McDonald’s, Coca-Cola, Amazon, and Apple gained traction, with supporters viewing it as an economic response to US trade actions. Overall, India’s measured yet firm stance signals its growing role in shaping future global trade dynamics.
Blog By:
Ms.Sonal Verma
Assistant Professor,Department Of Commerce & Management
Biyani Group of Colleges
