PM Narendra Modi issued a strong response on Thursday to the United States’ decision to double tariffs on Indian goods, asserting that the welfare of Indian farmers remains non-negotiable.
“For us, the interest of our farmers is the top priority,” said PM Modi during a public address. “India will never compromise on the interests of farmers, fishermen, and dairy farmers. I know we may have to pay a heavy price, and I am ready for it. India is ready for it.”
US Increases Tariffs to 50% on Indian Goods
PM Modi’s remarks followed the Trump administration’s latest move to increase tariffs on imports from India to a total of 50%.
On Wednesday, US President Donald Trump signed Executive Order 14257, imposing an additional 25% duty, citing national security concerns over India’s continued imports of Russian oil.
The new order states that India’s trade ties with Russia present an ‘unusual and extraordinary threat’ to US national security and foreign policy.
The US government will enforce the first round of tariffs starting August 7 and will implement the additional 25% levy after 21 days.
Exemptions apply to goods already in transit and those listed under Annexe II of the Executive Order.
India Resists US Pressure to Open Agricultural Market
During ongoing trade negotiations, the US has pushed for greater access to India’s agricultural sector, specifically targeting corn, soybeans, and cotton.
However, India has firmly resisted these demands, citing concerns about domestic livelihoods and the survival of small farmers.
India has also maintained strict limitations on dairy imports, fearing disruption to its rural economy.
PM Modi’s comments reinforced this stance, making it clear that India would not allow external pressure to undermine its agriculture-dependent population.
Economists have warned that the increased tariffs could slow India’s economic growth. Sonal Badhan, Economics Specialist at Bank of Baroda, told ANI that the additional tariff hike could shave off 0.2% to 0.4% from India’s GDP growth for FY26.
“We had initially priced in around 0.2% impact from the 25-26% tariffs,” she said. “Now, with the total hike reaching 50%, we expect further downward pressure unless a trade resolution is reached soon.”
Badhan added that the new tariffs will likely affect key sectors such as garments, precious stones, electronics, pharmaceuticals, auto parts, and MSMEs.
Despite the sweeping tariff increase, certain categories remain exempt under Annexe II of Executive Order 14257. Exemptions include mineral substances, metallurgical ores, fuels, industrial chemicals, and pharmaceutical precursors.
The Executive Order leaves room for future amendments based on ‘changing circumstances’. This includes possible retaliatory actions from India or steps taken by India and Russia to address the declared national emergency.
While trade tensions between India and the US have escalated sharply, both sides may still find opportunities to negotiate lower duties before the full impact hits exporters and the broader economy.
Also Read: PM Modi Commemorates Dr Swaminathan’s Agricultural Vision
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