In a resolute address, Indian Prime Minister Narendra Modi emphasized India's unwavering commitment to protecting the interests of its farmers, fishermen, and dairy farmers, despite escalating trade tensions with the United States. Modi's remarks came in response to the U.S. imposing a 25% tariff on Indian goods, raising the total duty to 50%, as a punitive measure for India's continued purchase of Russian oil.
Addressing the MS Swaminathan Centenary International Conference in New Delhi, Modi stated, "For us, the interest of our farmers is our top priority. India will never compromise on the interests of farmers, fishermen, and dairy farmers. I know personally, I will have to pay a heavy price for it, but I am ready for it."
The U.S. tariffs have significantly impacted India's economy, with exports to the U.S. dropping 14% in August. Labor-intensive sectors such as textiles, gems, shrimp, and carpets are projected to experience a dramatic 70% export loss. These industries employ around 21 million people, and the tariffs could heavily impact small and medium businesses, dampening broader investment sentiments.
In response to these challenges, the Indian government is focusing on enhancing domestic production and reducing reliance on imports. Modi's "Atmanirbhar Bharat" initiative aims to bolster local manufacturing, with plans to produce domestically-made semiconductor chips by the end of the year. Additionally, reforms to the Goods and Services Tax are expected to be completed by October, aimed at benefiting the middle class.
Despite the escalating trade tensions, both nations have expressed a desire to resolve their differences. Sergio Gor, President Donald Trump's nominee for U.S. ambassador to India, stated that the U.S. and India are "not that far apart" in resolving tariff disputes and expressed optimism that a resolution could be reached within weeks.
As the situation develops, India's steadfast commitment to its agricultural sector and economic resilience remains a central theme in its response to the U.S. tariffs.
