Trump's Tariffs on India: Can China or Russia Make Up For Lost Exports to US?

The United States is the biggest export market for India. Among its top 5 trading partners, the US is also the only country with which India runs a trade surplus. This surplus is now at risk with the 50% tariff recently imposed by President Donald Trump on imports from India. Can Prime Minister Narendra make up for it by cozying up to China and Russia? Recent trade data shows he can't. 

While India has enjoyed a significant surplus in trade with the US,  the South Asian nation has been running large trade deficits with China and Russia. Last year, for example, India had a $100 billion trade deficit with China and a $62 billion deficit with Russia. On the other hand, India ran over a $40 billion trade surplus with the US. Given these figures, it's hard to understand what India hopes to achieve by getting closer to Beijing and Moscow. The fact is that the US is the world's biggest economy that offers the largest and most profitable export market for most countries. Loss of the US export market spells major trouble for any economy in the world. President Donald Trump knows this and he is using it to make new trade deals to America's advantage. Europeans, Japanese and Koreans have essentially accepted higher tariffs in return for continued access to the US market, while China is negotiating a trade deal with Washington. 

The loss of the US export market also means heavy job losses in India's major sectors like textiles, shoes, gems and jewelry and shrimps exports. Christopher Wood, the global head of equity strategy at the investment bank Jefferies, puts the economic blow at £41 billion-£45 billion, according to the Guardian newspaper. He singles out textiles, footwear, jewelry and gems, all of which are highly labour-intensive, as “the most negatively impacted”. Tens of millions of jobs are at risk in these industries.  "The stakes for India’s government are political as well as economic. The prime minister, Narendra Modi, has pitched manufacturing as a way to provide jobs to the millions of young Indians who join the labour force each year. These industries employ tens of millions, directly and indirectly", the Guardian reports. 

Explaining the punitive India tariffs, US Treasury Secretary Scott Bessent has said: "India came to the table early. They’ve been slow rolling things. So I think that the president, the whole trade team has been frustrated with them. And also, you know, India, India has been a large buyer of sanctioned Russian oil that they then resell as refined products. So, you know, they have not been a great global actor". 

Indian Prime Minister Narendra Modi clearly misjudged what he needed to do with Trump 2.0. He continued business as usual, counting on his "bromance" with the US president to get a favorable deal. He thought the US policy of "strategic altruism" with India will continue as it had under the Trump 1.0 and Biden administrations. Modi let his billionaire friends Adani and Ambani rake in billions in profits on Russian oil trade. The discounted Russian oil Adani and Ambani bought was refined and exported for a huge profit to buyers around the world. Now the ordinary Indians are paying the price for Modi's folly. 

Worried about a slowing economy, the Modi government is now trying to stimulate domestic consumption by cutting GST (general sales taxes). It is a good move but it will not make up for dollars lost from the precipitous fall in exports to the US market. This fear is causing the Indian currency to fall against the US dollar. There are tough times ahead for the Indian economy. 

Related Links:

Haq's Musings

India's Unemployment Crisis

How Long Can Modi Escape Accountability For Murder? 

Modi-Trump Bromance Over

US Government Brackets Modi With Murderous Dictators

Asley Tellis Wants the US to Continue its Policy of Strategic Altru...

India Tariffs: Does Trump Have a Grand Strategy?

India's Ex Spooks Blame Kulbhushan Jadhav For Getting Caught

Ajit Doval Lecture on "How to Tackle Pakistan" 

Mohan Lal Bhaskar: An Indian Raw Agent in Pakistan

Views: 20

Comment by Riaz Haq 12 hours ago

Trump tariffs bring India’s massive garment industry to its knees - The Washington Post

https://www.washingtonpost.com/world/2025/10/17/india-trump-tariffs...

Just seven weeks after Trump imposed a 50 percent tariff on India, many of Tiruppur’s garment factories have ground to a halt, putting thousands out of work.

By Supriya Kumar
TIRUPPUR, India — If the tag on your T-shirt says “Made in India,” there’s a good chance it came from this southern industrial hub — long known as “Dollar City” for its dominance in the U.S. market.

Now, just seven weeks after the Trump administration imposed a 50 percent tariff on Indian exports, many of Tiruppur’s garment factories have ground to a halt. The slowdown has rippled through a vast network of hulking plants and small workshops, which employ more than 600,000 people. Thousands of fabric cutters, thread trimmers and sewing machine operators are suddenly out of work.

“Production has fallen by 25 percent across the board,” said G. Sampath, general secretary of the Center of Indian Trade Unions in Tiruppur. This city’s garment exports were valued at $3.7 billion last year, according to the Tiruppur Exporters’ Association, and a third of the apparel manufactured here is normally shipped to American retailers, including Walmart, Target and Sears.



Interviews with more than a dozen factory workers, labor contractors and business executives revealed how rapidly President Donald Trump’s trade war has upended lives and livelihoods across Tiruppur, a one-industry town where many workers have no written contracts or job security. Migrant laborers from rural villages have been sent home. Those still employed on the production lines said their hours and wages have been slashed. Exporters faced with frozen or canceled orders are focused on shipping out existing inventory, fearing new stock will go unsold; some said U.S. buyers have begun demanding discounts of up to 20 percent to offset the cost of tariffs.



Manohar Sahni, 44, spent the past two years here trimming loose threads from freshly stitched garments. He migrated to Tiruppur with his family from the impoverished state of Bihar in eastern India, drawn by the promise of steady work. His wife worked in a factory, too, and together they earned about $450 a month — enough for a modest living, and far more than they could make back home.

They were paid for each piece of clothing they produced. When production slowed and shifts disappeared, their income cratered to just over $250 a month, scarcely enough to cover food and rent, let alone the debts they had taken on for their eldest daughter’s wedding.

“I don’t know what to do,” Sahni said. “Should I use the little money I have to feed my family or repay what I owe?”



————-



Beyond the short-term pain, there are fears that Indian manufacturers could quickly lose their U.S. market share to competitors like Bangladesh and Vietnam, which face only 20 percent tariffs. “It will be easy for [American] companies to make the switch,” said Ajay Srivastava, founder of the Global Trade Research Initiative, a trade and technology think tank based in New Delhi.

Sanoj Kumar, 32, recalled rushing to finish and ship final orders for his employer before the heightened duties went into effect.

“They made us work day and night to get everything out in time,” said Kumar. “The brands even had agents come here to supervise and put pressure.” Days later, he said, he and his colleagues were told not to report to work. There were no more orders to fill.

Comment

You need to be a member of PakAlumni Worldwide: The Global Social Network to add comments!

Join PakAlumni Worldwide: The Global Social Network

Pre-Paid Legal


Twitter Feed

    follow me on Twitter

    Sponsored Links

    South Asia Investor Review
    Investor Information Blog

    Haq's Musings
    Riaz Haq's Current Affairs Blog

    Please Bookmark This Page!




    Blog Posts

    Major Hindu American Group Distances Itself From Modi's India

    "We are not proxies for India in the US", wrote Suhag Shukla, co-founder and executive director of the Hindu American Foundation (HAF) in a recent article for The Print, an Indian media outlet.  This was written in response to Indian diplomat-politician Shashi Tharoor's criticism that the Indian-American diaspora was largely silent on the Trump administration policies hurting India. …

    Continue

    Posted by Riaz Haq on October 11, 2025 at 2:00pm

    Gaza Genocide: Is the Powerful Israel Lobby AIPAC Losing Influence?

    Several Congressional Democrats have recently refused campaign contributions from AIPAC, the powerful Israel lobby, according to media reports. “Democrats who once counted AIPAC among their top donors have in recent weeks refused to take the group’s donations”, says a New York Times story titled  "Democrats Pull Away From AIPAC, Reflecting a Broader Shift".  “AIPAC is…

    Continue

    Posted by Riaz Haq on October 5, 2025 at 4:00pm — 8 Comments

    © 2025   Created by Riaz Haq.   Powered by

    Badges  |  Report an Issue  |  Terms of Service