Trump’s tariffs : What is India’s 50-50 Strategy ?
India’s frustration with US tariffs
India is tired of the contradictions in US tariff policy and is now trying to find a new 50/50 alternative strategy. The US recently extended its tariff deadline for China by 90 days, while India faces a hefty 50% tariff. This unequal treatment is causing resentment in India. An agreement between the US and China in Switzerland, under which the US received rare earth metals and China the necessary GPU chips, gave China tariff relief, but India’s position remains unclear.
India-US trade talks were scheduled in August, but the status of the talks has become uncertain after US President Trump called the Indian economy “dead”, although India still considers it possible.
In this situation, India has adopted a 50/50 strategy, in which it is trying to boost its trade with West Asia, Africa and 50 other countries, so as to reduce dependence on the US and European markets.
India has also started exploring the possibility of alliances with BRICS countries as a go-to option. However, the value of trade gained from these new markets may be less than that of larger markets like the US.
A potentially better option for India is the European Union (EU), where a free trade agreement is in progress. However, the EU’s strict environmental policies and a possible carbon tax may pose obstacles to this agreement. But, due to tensions between the US and China, the EU is also looking at India as an important strategic partner, which is a positive sign for India.
Key Points
1. India is disappointed with the unequal tariff policy of the US.
2. China has been given tariff relief by the US for 90 days, while India has to bear a 50% tariff.
3. US-China Switzerland agreement was signed in which both sides exchanged essential goods.
4. The future of India-US trade talks is uncertain, but India is working on its 50/50 strategy.
5. India is expanding trade relations towards West Asia, Africa and BRICS countries.
6. Trade agreement with the European Union is a possible option for India, but environmental policies are a challenge.
7. Europe is looking at India as an important partner due to the US-China dispute.
India’s 50/50 Strategy:
Due to unequal treatment with the US, India has decided to diversify its trade policy. This strategy is necessary not only to reduce dependence on one market, but also to strengthen its hold in global trade.
India already has strong relations in markets like West Asia and Africa, which can be strengthened further and exports can be increased on a large scale.
However, the economic potential and trade value of these markets may be less than the US or Europe, so India will have to focus on both quality and quantity.
US-China trade deal and India’s position:
Trump’s tariffs : What is India’s 50-50 Strategy ?The deal signed in Switzerland helped ease the tariff war between the US and China, allowing both sides to meet their needs. China got tech chips and the US got rare metals.
India’s exclusion from the deal reflects the US’ priorities towards it, causing India to face unequal treatment. This is a major crisis in India-US relations, which is worrying for India.
Uncertainty of India-US trade talks:
The status of trade talks between the two countries has become uncertain after US President Trump called the Indian economy “dead”. While India has indicated to continue the talks, the US stance is not clear. This uncertainty
