When it comes to Donald Trump and tariffs, India is now way beyond the point of noting ironies. In fact, the country is scrambling around looking at a 50:50 alternative strategy.
Yet, this news deserves some attention. Early morning today India time, US President Trump announced that the country was going to extend its tariff deadline with bete noire China for another 90 days.
To put it in other words, while 'ally' India gets whipped with debilitating 50 per cent duties, arch rival and, going by all indications, the very reason for Trump's launching of his tariff tirade, the People's Republic of China, gets away with extension after extension?
Initially, Trump had threatened Beijing with tariffs of up to 145 per cent but then backtracked after both countries reached an agreement after talks in Switzerland a month after the initial April 2' Liberation Day' announcements, whereby China got the GPU chips its tech industry wanted, while the US got the rare earth elements its tech and clean energy industries desperately needed.
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That moratorium was for a 90-day period and set to expire on Tuesday, which Trump has just now extended for another 90 days while both parties go back to the negotiating table.
Whether India will have similar luck is up in the air. Both nations were expected to hold the next round of talks in the last week of August, but it is presently unclear whether they are on or not. While Trump quipped to reporters that talks are on pause, this was after he called the Indian economy 'dead', but Indian government officials are on record informing a parliamentary panel that the talks are on course, scheduled for August 25 in New Delhi.
But with both sides hardening their stand and India having tied itself up in knots by whipping up domestic sentiments over the US trying to get into the protected agricultural products market, New Delhi is reportedly already on its 50:50 strategy.
This involves 'multilateralism', aiming at a set of 50 countries, especially those in West Asia (such as the UAE) and Africa, where India has a favourable balance of trade. The Commerce Ministry is apparently working sector by sector, figuring out how to leverage its manufacturing goods advantage by catalysing trade to a multitude of countries, instead of the earlier strategy of putting all its eggs into a few prominent baskets like the US or even the EU.
Earlier, when everything was hunky dory with Washington and Trump's return was heralded as an advantage for Modi's India, the American President's unpredictable demeanour has done more than just damage the supposed personal rapport both leaders enjoyed.
It has pushed India into the troublesome and complex process of finding alternatives from a multitude of options. This ranges from markets in the Gulf where Indian products have ready takers to the possibility of BRICS nations forming a strategic stand against American bullying—Brazilian President de Luna has already spoken with PM Modi on this.
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Then there is always a mix of African countries which India could tap. But here, even if volumes increase, it may not make up for the value being lost from the apparent drop in trade with the US.
That is because the US has been India's biggest trading partner in recent years, replacing China. Eighty-seven billion dollars worth of goods are exported there, forming 20 per cent of India's exports. This loss in business could cut India's GDP by as much as 0.4 per cent, with the very real threat of growth slowing down below 6 per cent as early as the ongoing financial year. Already, goods exports are flattening, with June 2025 figures at $35 billion, the same as June 2024. And this could get worse once (or 'if') Trump's new tariff of 50 per cent takes effect on August 27.
That way, India's best possible option would be to double down on the negotiations with the EU, where talks for a free trade agreement are in advanced stages.
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Here again, Europe's insistence on sustainable manufacturing and its plans to implement a carbon border tax on products that do not follow sustainable manufacturing processes could well trip up the negotiations. But the silver lining here is that the EU has also been singed by Trump's tantrums even while the bloc is distrustful of China's expanding influence. India, then, could be the 'next best thing' for the blue continent as well.