In 1857, Mangal Pandey defied the use of animal fat in rifle cartridges — a direct affront to Indian religious beliefs. His act became the spark for India’s first major uprising against colonial rule, a fight for dignity, belief, and self-determination.
Today, India has refused US dairy imports over a fundamental concern: American cows are often fed bone meal, fish powder, and animal fat — crossing a civilisational red line. This is not merely a dietary issue, but a matter of deeply held values.
The disagreement extends beyond logistics and tariffs. It affects millions of Indian farmers and dairy producers, many of whom operate in small or marginal setups under the MSME sector. Similar concerns surround other imports; particularly edible oils often derived from GM seeds.
While it would be rational for India to liberalise agricultural trade—allowing imports of GM seeds like soybean (with no proven health risks), owing to its shortage, permitting cheaper, heavily subsidised US agricultural imports — supported by $43 bn in subsidies — would create an uneven playing field. US corporations benefit from large-scale support, while Indian farmers contend with thin margins and erratic weather.
Similarly, pressuring India to buy F-35 jets or costly crude oil that doesn't align with its defence or energy needs is nothing but blackmail. Yielding to such pressure would undermine India’s standing, painting it as a weak player on the global stage. These consequences of these tariffs extend far beyond agriculture.
India needs massive investments in farm technology—GM crops included—and in improving marketing, logistics, and storage systems. The conversation must shift from merely identifying market failures to actively finding and implementing solutions. In this sense, an economy as vast as India’s cannot indefinitely protect half its population from market forces. If agriculture stays locked in low productivity, our growth will be hampered. Without the fluff, Trump is perhaps has thrown some introspection our way.
The 25% tariffs imposed by the US on Indian goods will severely strain trade, hitting agriculture and labour-intensive MSME sectors hardest. This imbalance threaten to reduce Indian exports by 12-18% with consequences far beyond agriculture. These tariffs undermine the competitiveness of Indian exports, jeopardising millions of farmers’ livelihoods, and small businesses reliant on access to the US market.
Efforts to expand bilateral trade to $500 billion by 2030 have stalled — not due to tariffs or policy inertia, but because India is defending its values, dietary ethics, and farmer livelihoods. What appears as a trade dispute is, in truth, a clash of worldviews: one grounded in corporate scale, the other in civilisational ethos.
Geopolitics may eventually compel compromise. A US trade delegation is set to visit India on August 25, aiming for a first-phase deal. The US had previously slashed China’s 145% tariff rate to 30% after China agreed to supply rare earths and magnets, a product of Beijing’s near-monopoly and strategic leverage.
With China’s slowdown, US-China decoupling, and India’s rising strategic value, Washington is eager to deepen ties. But for India, any deal must be fair — and culturally respectful. This isn’t just trade liberalisation; it’s about preserving identity.
Donald Trump’s attacks on India’s BRICS participation and his threat of 100% tariffs on Russian oil buyers — including India — reverberated across New Delhi and Washington. But behind the rhetoric lies nuance: India is not opposing the US, but balancing energy security, strategic autonomy, and economic resilience.
India, importing 88% of its crude oil, turned to Russia amid the Ukraine war for affordability. Russian oil, once 2% of Indian imports, now exceeds 2.2 mn barrels a day — more than India buys from West Asia. The rationale is economic, not ideological. In 2022, Europe bought far more Russian gas than India — without facing US criticism.
India exported $88 bn to the US last year. Of that, $31-35 bn came from MSMEs — 40-45% of the total. These small businesses form India’s labour-intensive export core across sectors like textiles, apparel, gems, jewellery, leather, auto parts, handicrafts, and engineering goods. Tariff hikes won’t just trim margins — they’ll cost jobs.
In the gems and jewellery sector alone, over 1 lakh livelihoods are at risk if barriers harden. This pattern repeats across export hubs in Surat, Agra, Panipat, Coimbatore, and Ludhiana, where small businesses support tens of millions of workers.
Meanwhile, over 1,700 US-operated GCCs in India generate $64.6 bn in revenue and employ 1.9 mn professionals, benefits flowing to US multinationals. These centres leverage Indian talent and infrastructure to deliver high-margin services to the US.
India also supplies 40% of America’s generic medicines. Disrupting this link would hurt Indian pharma and affect US healthcare, especially if IP or pricing disputes arise.
A 25% export drop to the US would cost India $21.75 bn annually. Sectors like textiles and auto parts — employing over 70 mn — would bear the brunt. The rupee could weaken, and export-driven stocks may underperform amid uncertainty.
US buyers, aiming to cut costs, may pressure Indian suppliers to absorb losses. India’s competitors are advancing. Vietnam, securing a deal early, enjoys a 19% tariff rate. Its electronics, textiles, and seafood exports are surging. Indonesia, the Philippines, and Malaysia are following similar paths. Meanwhile, Britain now offers Indian exports zero-duty access under a new FTA — a model India could emulate with the EU to diversify trade risk. A deal with the US lowering tariffs to 10-15% — as extended to Britain, the EU, Japan, and South Korea — would be a significant win.
India is not without leverage. This impasse highlights that globalisation is not only about economics, but values. India can increase imports of US energy and defence goods, showing no aversion to trade. But on issues like dairy, agri, data privacy, India will not yield easily except allowing crops like soyabean, corn, pulses and other crops of which there is a demand-supply gap.
In an increasingly interconnected world, Trump's ‘America Alone’ approach stands in stark contrast to the realities of modern global interdependence. It may be time to reconsider the ‘America First’ doctrine and embrace a more collaborative, globally minded perspective. Economic prosperity in the 21st century cannot be sustained in isolation; it requires cooperation, shared growth, and integrated trade policies.
Trump’s call for tech giants like Google and Microsoft to 'put America first’ and his criticism of outsourcing raises concerns for India, whose tech sector is vital to the global economy. While respecting US ambitions, India must defend its industries and strategic autonomy while safeguarding both sovereignty and innovation.
Just as Mangal Pandey’s defiance in 1857 sparked a broader movement against colonial domination—highlighting the power of collective resistance over individual defiance—today's challenges, from trade to climate to security, demand unified global responses. As cultures, economies, and societies become more intertwined, the path forward must reflect mutual interest and global engagement rather than unilateralism.
Source Name : Economic Times