Trump’s tariff giant opens its mouth wide – it will swallow up India’s annual exports worth Rs 5 lakh crore
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The US decision to impose 50% tariff on India is a big challenge for Prime Minister Narendra Modi at both diplomatic and economic levels. Till now, the close “friendship” between Modi and Trump has been considered the biggest strength of India-US relations. But Trump’s tough decision has shown that international trade relations are not based on friendship, but on interests. If we talk about the crisis facing India, then let us tell you that exports worth about $60 billion (about Rs 5 lakh crore) will be directly affected, which includes labor-intensive sectors like textiles, diamonds, jewelry, shrimp and carpet. This can affect millions of jobs. Due to Trump’s tariff, countries like China, Vietnam and Mexico can replace India in the US market, due to which there is a possibility of a decline in India’s GDP growth rate.
The Global Trade Research Initiative (GTRI) estimates that exports in the affected sectors could fall by up to 70%, putting millions of jobs at risk. Economic analysts also believe that countries like China, Vietnam, Mexico, Turkey and Pakistan could replace India in the US market. In the long run, these countries could permanently take over India’s traditional market. Analysts also believe that India’s GDP was $4,270 billion in FY2025 and was expected to grow at a rate of 6.5% under normal circumstances. But the decline in US exports will reduce this baseline to $4,233 billion. As a result, growth could decline to 5.6% in FY2026 – a decline of 0.9 percentage points.
If seen, this move of Trump is definitely a setback for Modi, but Modi’s specialty has been that he turns crises into opportunities. If India learns from this situation and diversifies its trade relations and strengthens the domestic market, then this crisis can also become the basis of India’s economic self-reliance in the coming years.
Now the question arises that how will Modi rescue the country from this crisis, the answer is that the strategy has been made, that is why the confidence of the Prime Minister, Union Ministers and government officials is worth seeing. Let us tell you that markets are being diversified and new export opportunities are being explored in Europe, Africa, Latin America and ASEAN countries. Along with this, the domestic market is being strengthened through “Make in India” and “Vocal for Local”. Apart from this, the exercise of making trade agreements with the European Union and Gulf countries has started rapidly. At the same time, there is a possibility of giving special relief package especially to the textile and gems-and-jewellery sector.
However, Trump’s move is a big setback for India in the immediate term. But if the Modi government quickly works on an alternative market and domestic stimulus policy, then this crisis can also give a new direction to India’s economy and strengthen self-reliance.
