In a firm response to the tariffs imposed by the United States, Prime Minister Narendra Modi on Thursday reaffirmed that the interests of India’s farmers remain a top national priority and will not be compromised.
“For us, the welfare of our farmers is paramount. India will never sacrifice the interests of its farmers, fishermen, or dairy producers. I understand this stance may come at a significant cost — and I am prepared for it. India is prepared for it,” said PM Modi.
During trade negotiations, the United States had been pressing for broader access to India’s agricultural market, particularly for corn, soybeans, and cotton.
However, India has consistently resisted opening its agricultural and dairy sectors, citing concerns over domestic livelihoods and the potential impact on local farmers. On Wednesday, US President Donald Trump signed an Executive Order imposing an additional 25 per cent tariff on imports from India.
According to the White House, the decision is based on national security and foreign policy concerns, with Trump citing India’s direct and indirect imports of Russian oil as posing an “unusual and extraordinary threat” to the United States. With the new measure, the total tariff on Indian goods entering the US now stands at 50 per cent.
The initial 25 per cent tariff came into effect on August 7, while the additional levy will kick in 21 days later. It will apply to all Indian-origin goods imported into the US, except those already in transit or meeting specific exemption criteria.
The Executive Order also leaves room for future modifications, including in cases of retaliation by affected countries or if India or Russia take steps to address the concerns underpinning the US national emergency declaration.
Meanwhile, economists warn that the US tariff hike could shave 0.4 per cent off India’s GDP growth for FY26. Sonal Badhan, Economics Specialist at Bank of Baroda, told ANI:
“We had initially factored in a 0.2 per cent impact on GDP growth due to the 25–26 per cent tariffs. Now, with the additional 25 per cent set to take effect in 21 days, there is a possibility of negotiations resulting in lower rates.”
She added that the eventual impact on GDP could range from 0.2 to 0.4 per cent, depending on the final trade outcome. Sectors expected to be hit hardest include garments, precious stones, electronics, pharmaceuticals, auto parts, and MSMEs.
While the new order targets most Indian imports, certain goods have been excluded under Annex II of Executive Order 14257. These exemptions include some mineral substances, metallurgical ores, fuels, industrial chemicals, and pharmaceutical precursors. (Agencies)
