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, think tank GTRI said on Friday.
The Global Trade Research Initiative (GTRI) 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.
"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," GTRI Founder Ajay Srivastava said.
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.
"Gains in the first two years might recover only USD 10-15 billion of the USD 50 billion lost," he said.
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.
"India's best role here is to quietly highlight the tariffs' cost to American voters," Srivastava said.
He added that in an era when economic power is used as a weapon, survival isn't about avoiding confrontation.
"It's about picking the right battles, anticipating the next move, and playing for the long win," he said.
The Global Trade Research Initiative (GTRI) 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.
"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," GTRI Founder Ajay Srivastava said.
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.
"Gains in the first two years might recover only USD 10-15 billion of the USD 50 billion lost," he said.
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.
"India's best role here is to quietly highlight the tariffs' cost to American voters," Srivastava said.
He added that in an era when economic power is used as a weapon, survival isn't about avoiding confrontation.
"It's about picking the right battles, anticipating the next move, and playing for the long win," he said.
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