Need to Take Urgent Steps to Protect
India’s Economic Interests

The astronomical penal tariffs imposed by the United States on imports from India has come into effect and the real impact of these actions on Indian economy might take some time to be known. Still, it is clear that India may have to take some hits as the United States happen to be our topmost trading partner. In 2024, the total exports from India to the US was to the tune of $ 87.3 billion, while our imports form the US were of $ 41.5 billion.

The US administration under Donald Trump has described this $ 40-bullion-plus trade balance in India’s favour as a result of rapacious trading practices on India’s part, and hence the imposition of extremely high tariffs which now stands at 50 percent on Indian exports, including the 25 percent penalties that came into effect on August 27 for India’s trading in Russian oil. The reasons sited by the the US are hypocritical as there are many other counties who trade with Russia, including European countries, though India is singled out for harsh treatment. Evidently, the real reasons are political and we will have to resist the US pressure tactics to make India into a junior partner to the US imperialist designs. India’s economic independence is a matter of critical significance for our national sovereignty and in this context we cannot compromise, whatever may be the costs. At present, Indian administration appears to be resisting such pressures as seen by the statements issued by the External Affairs Minister S Jaishankar, the Commerce Minister Piyush Goyal, as well as some indirect comments made by Prime Minister Narendra Modi a few days ago.

But right now, what is important is to take an urgent assessment of the impact of these sanctions have had on the domestic industries involved in the US trade, and provide assistance to the entrepreneurs, employees and others concerned. Tens of thousands of workers are employed in these sectors and a continued trade stand-off could hit their jobs and incomes, throwing thousands of families into serious financial difficulties. It is also possible that many of the small and medium level enterprises involved in the exports to the US could face ruin and they may find it difficult to recover if urgent support is not provided.

To face this national crisis, we will have to take some immediate steps as well as some long term strategic decisions. First, as an immediate measure, financial assistance to the industries hit by the US actions is necessary and these will have to be considered on the lines of support provided during Covid-19 crisis. The second aspect is to look for more reliable trading partners especially in the Asian, African and Latin American continents. The West has proved a generally untrustworthy partner in its dealings with the global southern countries like India.

But at a long term level, it is necessary to take stock of the impact of the globalization policies have had on India. Did the promises of the globalisation and liberalization policies, made by the Indian Government at the time of the adoption of these policies in the early nineties, bear fruit or, instead, put more and more Indians into economic misery and destitution? Did the country really gain by its pro-Western, pro-Israeli policies that we adopted since the nineties? Are we in a position to safeguard our country’s national interests in the face of such bullying tactics from the US and its allies?

We need to take an objective and dispassionate look at such critical issues and reassess our priorities. The present moment when we are facing a national crisis must be converted into an opportunity where India can chart out an independent and dignified course in its international relations and trading practices, that will ensure our economic self reliance, sovereignty and dignity.

Mohammad Shafi
National Vice President
Social Democratic Party of India