The Network of Observers.

The US raised tariffs on Indian goods to 50 per cent, citing India's continued purchases of Russian oil. The new tariffs came into effect on August 27, making India one of the economies hit hardest by US tariffs.

As India¡¯s largest export market, U.S. new tariffs threaten India¡¯s exports and employment and India¡¯s exporters are prepared to respond to a sharp decline in U.S. orders.¡±The Economic Times says India is facing the worst trade shock in years.Economists expect U.S. tariffs to slow India¡¯s economic growth.

On the eve of the new U.S. tariffs, Prime Minister Modi made a tough statement, saying the government he led would protect the interests of farmers and small regardless of how much pressure he faced.

Previously, India and the United States went through five rounds of trade negotiations. India was once optimistic about the outcome, believing that tariffs could be around 15%. However, as the effective date of tariffs approaches, the United States has not given India a "surprise".

An official at the Indian Ministry of Commerce and Industry, speaking on condition of anonymity, told Reuters on the 26th that the Indian government has given up any hope that the United States will immediately reduce or delay tariffs.

Exporters hit by tariffs will receive financial support from the Indian government, which also encourages them to explore markets in China, Latin America, and the Middle East, the official added.

According to the Office of the United States Trade Representative, the bilateral trade volume between India and the United States in 2024 is about $129 billion, with U.S. merchandise exports to India totaling $41.8 billion and imports of $87.4 billion, resulting in a trade deficit of $45.7 billion.

The new tariffs are expected to affect more than half of India's exports to the United States, covering clothing, jewelry, footwear, furniture, chemicals and other sectors.

The picture shows Trump (left) and Modi (data map/foreign media)

¡°U.S. customers have stopped new orders,¡± Pancage Chada, chairman of the Indian Engineering Export Promotion Commission, told Reuters, ¡°and because of these additional tariffs, India¡¯s (US) exports could drop by 20 to 30 percent from September.¡±

The high tariffs threaten India's competitiveness in exports, making it difficult to compete with competitors such as China and Vietnam, Bloomberg said at the same time, it also raised questions about Prime Minister Modi's ambition to turn the country into a global manufacturing hub.

¡°This is a strategic shock that threatens India¡¯s long-term position in the labor-intensive market in the U.S. This could lead to a massive unemployment boom in (India¡¯s) export centers and weaken India¡¯s participation in the global value chain,¡± said Ajai Srivastava, founder of the New Delhi think tank Global Trade Research Initiative.

He added that the tariffs would benefit India's competitors, and even if the tariffs were lifted in the future, India could be excluded from key markets.

Indian rating agency CareEdge predicts that the annual growth rate of India¡¯s GDP could fall from 0.8 percent to 1 percent if the high U.S. tariffs persist.

Rajani Sinha, chief economist of CareEdge, told the Economic Times that high tariffs may weaken India's competitiveness, lead to the loss of market share and amplify the impact on economic growth.

However, some economists point out that India¡¯s relatively low share of exports to the U.S. (about 2% of GDP), coupled with strong domestic demand, will help mitigate the tariff shock. Bloomberg mentions that India¡¯s private consumption accounts for about 60% of the country¡¯s GDP.

According to Reuters, the Indian government has pledged to provide financial assistance to exporters. At the same time, officials from the Indian Ministry of Commerce and Industry said that the government has selected nearly 50 countries as destinations for Indian exports, especially textiles, processed foods, leather products, seafood and other products.

However, Chadha said that Indian exporters see limited room to expand into the domestic market or other markets.

Bloomberg said that India was one of the first countries to open trade talks with the Trump administration, but the country's high tariffs and protectionist policies in agriculture, dairy and other fields have frustrated U.S. negotiators.

In recent years, as Trump has repeatedly accused India of buying Russian oil, relations between India and the United States have worsened further.New Delhi has argued that such purchases help stabilize the energy market and said it will decide whether to continue buying Russian oil based on economic interests.

On August 25th, Modi made a tough statement on US tariffs, saying that no matter how much pressure it faces, the Indian government will never let small entrepreneurs, farmers and farmers be hurt. "No matter how great the pressure is, we will continue to strengthen our strength to resist challenges."

Video of Prime Minister Modi

However, Bloomberg revealed on the 26th, citing multiple people familiar with the matter, that while the Indian government made a tough stance, India also planned to cut Russian oil imports. According to people familiar with the matter, this is a "moderate concession" made by India to the United States, but it also shows that the country has no plans to sever ties with Russia.

The report pointed out that deteriorating relations have prompted India to gradually distance itself from the United States and deepen ties with other BRICS members. Indian Foreign Minister Sujarsen said during his visit to Russia last week that India and Russia hope to increase bilateral trade volume by 50% to US$100 billion in the next five years.

On the other hand, relations between India and China are also warming. Reuters said that Modi will visit China at the end of this month, which will be his first visit to China in seven years.

China is one of India's largest trading partners. In 2023, the bilateral trade volume between China and India will be US $136.22 billion, a year-on-year increase of 1.5%. Among them, China's exports to India were US $117.67 billion, a year-on-year increase of 0.8%, and China's imports from India were US $18.55 billion, a year-on-year increase of 6.1%.

On August 19, local time, Indian Prime Minister Narendra Modi met with Wang Yi, member of the Political Bureau of the CPC Central Committee and director of the Foreign Affairs Office of the CPC Central Committee, at the Prime Minister's Office in New Delhi. Modi said that India and China are partners rather than rivals, and both face the common task of accelerating development. We should strengthen exchanges, enhance understanding and expand cooperation, so that the world can feel the great potential and bright prospects of India-China cooperation. Both sides should look at bilateral relations from a long-term perspective, and the arrival of the "Asian century" is inseparable from India-China cooperation.

Wang Yi said that under the current international situation, the strategic significance of China-India relations is more emphasized, and the strategic value of China-India cooperation is more prominent.We will seriously implement the important consensus of the leaders of the two countries, strengthen exchanges and cooperation in various fields, promote the stability of China-India relations, better benefit the people of the two countries, and make the due contribution of the two great civilizations of China and India to the cause of human progress.

Extended reading

After angry Modi did not answer the phone, Trump publicly named "shamed".

As passionate as feelings once were, now anger is as strong as it is.

Trump and Modi meet to hug.

Trump and Modi, the two previously met, must be tightly embraced, now the two not only do not meet, not even phone calls, Trump more rarely name insults Modi.

It's not that we don't understand, it's that the world is changing too fast.

According to German media reports, Trump tried to call Modi four times recently, but Modi refused.

Please note: four times.

The Chinese say "three things can't be done," but the Indians say I hate the most three or four times is not enough, Trump you keep eating closed doors.

Why?

Modi was angry.

In the words of German media, Modi firmly refused, arising from both ¡°deep anger¡± and ¡°precautionary consideration.¡±

In Modi's view, Trump had a knife in his back, too rude.

Anyway, in public, Modi likes Trump very much, and once publicly stood for Trump. In Indian words, "Modi always hugs Trump like a long-lost brother".

What about Trump in India?

Trump wants to make money from India, with 25% tariffs not negotiated, and he also uses India to buy Russian oil, adding 25% tariffs.

As a result, the tax rate on Indian goods exported to the United States reached an unprecedented 50%, which was officially implemented on August 27.

The highest in the world, tied with Brazil.

It turns out that Indians thought that they were close friends of the United States. In the end, it was discovered that India was the opponent of the old American fist.

This is not enough. Trump also lambasted India as a "dead economy".

Indians are being scolded for being the fastest growing major economy in the world every time, and you call us a "death economy"?

India is a big country after all, and Modi has a strong personality. Therefore, Trump's call was not answered.

Trump calls again, Modi will not answer again.

I would have heart to the moon, but the moon shines ditch!

And, the other day, Modi spoke out publicly and said, "I will tell our small entrepreneurs, our brothers and sisters who are shopkeepers, our brothers and sisters who are farmers, our brothers and sisters who are livestock farmers... Whether it is small entrepreneurs, farmers or farmers in our country, for everyone, I assure you that your interests are the most important."

He stressed that the Indian government will never let small, farmers and farmers be hurt, ¡°no matter how much pressure, we will continue to strengthen our strength to resist the challenge.¡±

Moreover, India also stated that I will continue to buy Russian oil.

India¡¯s Foreign Minister Sujetin said: ¡°It¡¯s ironic that the U.S. government blames others for doing business, but if you don¡¯t like India¡¯s oil or finished oil, don¡¯t buy.

What does that mean?

The big stick of the United States has met the tough bones of India.

The temper of the Indians has also risen, and we will not kneel.

But is Trump a good man?

Recently, when it comes to the Russia-Ukraine conflict, Trump has flaunted his "achievements" in mediating the India-Pakistan conflict, and also disclosed a detail.

He said: "I spoke with Modi (at the time) and threatened him to end the trade deal within 24 hours if the war did not end, but he stopped for only five hours."

Trump is not unbelieving.

Trump has previously claimed that he has prevented the outbreak of the nuclear war in India.This was strongly denied by India, believing that the ceasefire in India has nothing to do with Trump, and is the initiative of Pakistan to seek reconciliation.

Trump, you are eating Indian tofu!

But Trump did not give up, always talking about mediating peace between India and Pakistan, and now he has gone even further, publicly naming Modi, saying that Modi has implemented faster than he asked.

This is not publicly humiliating Modi and what?

I see a lot of Indian bloggers shouting, it¡¯s a ¡°explosive news,¡± Modi, you¡¯re too weak.

Trump and Modi are ¡°true friendship¡± comics.

Oh, and Trump used to say that in the India-Pakistan war, five fighter planes were shot down; Now it's been upgraded again and says there are 7.

0:5, is one of the biggest annoyances on the Internet about the conflict in India, and one of the biggest annoyances in India this year.

Because the world is inclined to Pakistan's claim that five Indian fighter jets were shot down by Chinese warplanes.

Trump is also one of the world¡¯s leaders, the first to not mention which pot, publicly mentioning five warplanes.

I saw that after Trump spoke, India¡¯s opposition leader, Rahul Gandhi, immediately handed over Trump¡¯s video, asking, ¡°Modi, what is the truth about the 5 aircraft?

Finally, India failed to make it to the Air Force Chief of Staff to "clarify": it was India that shot down five Pakistani fighter jets.

The whole world is stunned, India, can you do that?

Such good news, and you didn't announce it for three months?

But now, Trump said seven more, this is how directly face, India, what do you do?

It must be said that in the field of diplomacy, dignity is never given to others, but is won by oneself.

Finally what do you think?

Let's make three superficial points.

First, India should have woken up a long time ago.

This has been said repeatedly before.

Because there are Westerners lamenting that Trump is undermining 20 years of US diplomacy with India, pushing India towards Russia and China.

What lament!

In fact, in the past 20 years, India has been on both sides, and the fantasy of becoming an ally of the West is not only a dream, but also a dream.

India is not Japan, after all, can the West not tolerate a rising China, but can it tolerate a rising individual India?

If you need India to restrain China, India is a bargaining chip; when you don't need India, India is a broken shoe.

Since they are broken shoes, they will be abandoned sooner or later.

Trump just kicked this broken shoe into the trash can in the most direct and insulting way.

Second, watch Trump win and Modi win.

After all, these two leaders with distinctive personalities were once known for winning learning.

In many international battles, they always claim to have won, and they have won.

Now, the two old enemies are fighting head-to-head and fighting directly.

Oh, really thin, people's feelings are evil, the rain sends yellow dawn and falls easily. "When I used to go with people to see the moon, they called me sweet, now the new people have changed the old people, they called me cow lady."

On the field of power, yesterday's intimacy and today's ruthlessness are just the norm.

Whether Trump's fist is hard or Modi's wrist is ruthless, let's ride a donkey and read the song book-we'll see.

Third, it is not excluded that there is a sudden reversal.

I always feel that we should also have a clear understanding of this.

Just as they were pinching you to death, suddenly the two looked at each other again and happily entered the bridal chamber. Although it is very dramatic, the enemy is the enemy, what can't happen?

After all, the only certainty we know in this world is Trump¡¯s uncertainty.

After all, although Trump publicly insulted Modi and Modi refused to answer the phone four times, Modi has never publicly named Trump by name.

Leave the favor to the front line, and we will meet in the future.

Moreover, there are various signs that although they say they will continue to buy Russian oil, some Indian oil companies are quietly reducing their imports.

Modi, somewhat still keeps some illusions; Trump is more about putting extreme pressure on India.

Only, even Trump's hard kick, eventually turned into a small puff, but the humiliation of the Indian heart, estimated for a long time can not be eliminated.

After all, without comparison, there is no harm.

Trump says face-to-face is face-to-face, but has China, even in its worst relationship with India, said such insulting words of India to insult Modi?

Real strength never lies in being exhausted, but in being calm and calm.

Indeed, it is a blessing for India to have a neighbor with a consistent emotional stability policy like China.

In India, don't be unaware of your blessings when you are blessed.

Where to go, Modi needs to get more clear.