What's Next as US Imposes 50% Tariffs on India

Trade Impact - The US has imposed a 50% tariff on some Indian goods, doubling the existing 25% duty [1] - These tariffs are "punishingly high" for India, the highest among Asian economies, and will affect different sectors differently [2] - The US is India's largest export market, with Indian exporters selling $87 million worth of goods to the US market last year, representing 2% of India's GDP [2] - High tariffs could shut down the market for Indian exporters, forcing them to diversify into newer markets [3] - Labor-intensive sectors like footwear, leather, gems, jewelry, and textiles are at risk of unemployment due to buyers putting orders on hold [4] - India's ambition of becoming a manufacturing powerhouse may be thwarted [5] Economic Strategy - India is primarily a consumption-led economy, with 60% of its GDP driven by consumption [5] - The Indian government is trying to boost consumption by cutting consumption taxes to mitigate the economic pain [6] - The Indian economy will still experience an economic hit despite being driven by domestic demand [7] Geopolitical Implications - The tariffs will have a far-reaching impact on the strategic relationship between India and the US [7] - The tariffs are supposedly for India's continued purchase of Russian oil [8] - India is edging away from the US and moving closer to the BRICS block, with increased trade pledged with Russia over the next 5 years [9][10] - China and India are trying to improve their ties, with Modi expected to meet Xi Jinping [10]