US President Donald Trump’s decision to impose a 25% additional import duty plus penalty on goods imported from India is “completely unreasonable” even as negotiations for a trade agreement are underway, Congress MP Shashi Tharoor said on Thursday.
The Lok Sabha MP from Thiruvananthapuram also said that India can exercise limited flexibility during the trade talks but should not entirely buckle under US pressure and keep its national interest as priority.
His remarks, to reporters outside Parliament, came on a day the US’ tariffs came into effect and hit Indian markers and rupee. The 25% figure would single out India more severely than other major trading partners, and threatens to unravel months of talks between the two countries. The penalty was imposed on India for purchasing crude oil and military equipment from Russia.
“He had specified a penalty for our buying oil and gas from Russia. It could take up to 35% or 45%, we don’t know how much. If you are going to talk about 100% penalty, then you are going to destroy our trade. It may be just a bargaining tactic, as you know the trade negotiations are still going on. And therefore, there is a possibility that in the course of negotiations, this may come up. If it doesn’t, it will certainly damage (trade),” Mr Tharoor, who has off late been a vocal supporter of the Narendra Modi government, said.
“America is a very big market for us, our exports alone are 87-90 billion dollars. If there is a dramatic drop, then it will hurt us. From estimates already coming, we may end up losing half a percent of our GDP,” he added.
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The Congress leader said the US’ demands are “completely unreasonable and our negotiators have every right to resist”. “For example, we have about 700 million Indians who are dependent on agriculture. We cannot risk their livelihood to make America happy. America has to understand our needs as well,” he said.
India’s tariffs on the US are not unreasonable, he said, referring to India’s average tariff of 17%. “It’s about 17% on an average and American goods are not priced that competitively that they can sell so much in the Indian market. If Mr Trump thinks ‘oh, bade bade markets hain (there are huge markets) and we can sell a lot of items’, then they have to look at their own prices. Are they competitive? Most of the things they want to sell us as manufactured goods are cheaper from other supplies. Everyone will buy what they can afford to buy,” he said.
“I do believe the Americans stand as not being totally reasonable,” he reiterated. “I believe our stand, we can possibly show some flexibility but there is a limit to how much flexibility we can show. Everything depends on the ongoing negotiations. I wish our negotiators good luck and good courage, because we can’t afford to buckle under. We have to keep our national interests as number one,” he said.
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It is not for the first time that Mr Tharoor has spoken out against the US over its tariffs. Earlier this year, he slammed Mr Trump’s “empty threat” to impose a 100% tariff against BRICS nations, if they tried to move away from the dollar in international trade.
The Congress MP, whose frequent incessant support for the Centre has caused friction within his own party, also said the US’ tariffs have completely shaken up the world and expressed concern over the fallout of these duties on some countries.
President Trump’s announcement on Wednesday came as a surprise, as the two countries are negotiating a trade agreement. It is also being seen as a pressure tactic to get New Delhi to agree to demands made by the US, which has, in recent days, got favourable trade deals with major partners like Japan, the UK and the European Union.
In a social media post, Mr Trump termed India’s trade policies as “most strenuous and obnoxious”.
After the announcement, he said the US is currently negotiating with India.
India, on the other hand, said it is studying the implications of the US move and will take all steps to “secure our national interest“.
