Congress lawmaker Shashi Tharoor on Thursday severely condemned US President Donald Trump's action of raising an additional import duty of 25% and a penalty on Indian products, calling it "completely unreasonable"—while the trade negotiations between the two nations are continuing.
Addressing the media outside Parliament, the Thiruvananthapuram Lok Sabha MP asserted that India needs to hold its ground at the negotiating table without succumbing to excessive external pressure.
According to him, of course, some flexibility has to be given in negotiations, but the national interest of the country must take precedence.
Trump’s announcement, which came just a day before the new tariff was set to take effect, caused ripples in Indian financial markets and impacted the rupee. The steep duty specifically targeting Indian imports, coupled with a penalty over New Delhi’s purchases of Russian crude oil and defense equipment, has raised concerns about the future of ongoing trade discussions.
"He had put a penalty on our purchasing oil and gas from Russia. It may be up to 35% or 45%, we don't know. If you are going to discuss 100% penalty, then you are going to kill our trade," Tharoor added. "It can be a negotiating tactic, because you do know the trade talks are still ongoing. And so there's a chance that during negotiations, this could come up. If not, it will surely hurt (trade)."
Tharoor said the US still is a large market for Indian exports, which are valued at approximately $87 to $90 billion. He cautioned that if relations between the two countries decline because of these tariffs, the implications for India will be dire. "From estimates already coming, we may end up losing half a percent of our GDP," he said.
Labeling Washington's expectations as "completely unreasonable," the leader of Congress emphasized that India's trade negotiators are entirely justified in pushing back. He gave the example of India's huge agricultural economy, where approximately 700 million individuals depend on agriculture for their livelihood. "We cannot endanger their livelihood to please America. America needs to realize our needs too," he insisted.
Discussing the US argument that India's tariffs are too high, Tharoor disputed this by stating India's average tariff rate has been around 17%, which he feels is justified. "It's about 17% on an average and American goods are not priced that competitively that they can sell so much in the Indian market," he explained. "If Mr Trump is thinking 'oh, bade bade markets hain (there are big markets) and we can sell a lot of things', then they need to glance at their own prices. Are they competitive? Most of the things that they want to sell us as made goods are more economical from other sources. People will buy what they can buy."
Repeating himself, Tharoor said the US administration's stance is anything but equitable. "I do think the Americans are not being completely reasonable," he said. While he admitted India may demonstrate "some flexibility," he cautioned there is a limit. "It all hangs on what is going on in these negotiations. I hope our negotiators good luck and good sense, because we cannot give way to pressure. We must keep our national interests as top."
This is not the first occasion that Tharoor stood against Trump's tariffs. Back in early this year, he condemned the former President for promising a 100% tariff to BRICS countries if they shifted away from the US dollar as a currency in global transactions.
Noting the global impact of Trump's trade policies, Tharoor said the latest tariff hike has "completely shaken up the world" and could have significant consequences for several economies.
President Trump's tariff announcement was sudden against the backdrop of continuous talks between the US and India for a bilateral comprehensive trade agreement. It is seen by analysts as being aimed at coercing India into accepting Washington's conditions—especially since the US had recently inked benign trade agreements with important partners like the UK, Japan, and the European Union.
In a different social media message, Trump referred to India's trade practices as "most strenuous and obnoxious" and asserted that talks continue.
India, for its part, reacted gingerly, saying it is now evaluating the implications of the US move and will do everything necessary to "secure our national interest.
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