'Trump Is Frustrated'

'What India has done will surely embolden more countries to stand up to Trump.'

IMAGE: US President Donald John Trump talks to the media at the Lehigh Valley international airport in Allentown, Pennsylvania, August 3, 2025. Photograph: Ken Cedeno/Reuters

South Korea: 15%
EU: 15%
Japan: 15%
Philippines: 19%
Indonesia: 19%
Vietnam: 20%
UK: 10%
Mexico: 30%
Canada: 35%
India: 25%

These are the trade tariff rates imposed on various countries by United States President Donald John Trump.

There is an additional penalty for buying oil from Russia for India.

Though the trade negotiations between India and the US are still going on, from today Indian exporters have to pay 25% on all the goods exported to the US market.

How will this affect the Indian economy which Trump described as 'dead'?

"Our exports are just 20% of our GDP. And exports to the US are 18% of our total exports. The merchandise exports to the US is only 3% to 4%. If 25% of that comes down, I don't think we will notice the impact," Ajay Srivastava, founder of the Global Trade Research Initiative, tells Rediff's Shobha Warrier in the concluding segment of a two-part interivew:.

Part 1 of the Interview: 'Trump Wants Big Pie Of India's Economy'

Trump said India can take its dead economy down for all I care, like China's....

In the first trade war, he was after China. But China rebutted.

This time, he has almost forgotten about China and targeting poorer countries like Bangladesh, Cambodia and other smaller countries.

This shows his frustration and nothing else.

China is the most industrialised country in the world, and they manufacture 30% of the world's production. They are the top manufacturer in the world.

And the US cannot live without Chinese products.

So, when he is talking about China and hyphenating India with China and Russia, it shows his frustration; nothing else.

Do you feel India should come out of its anti-China stance and start a good working trade relationship with China so that it can nullify what the US is doing?
A collaboration of India, China and Russia against the US...

India's trade relations with China and Russia are superb.

Even when we had a military stand-off with China in 2020, trade between the two countries increased tremendously, and imports from China increased. The Indian government did not pass any order limiting imports from China.

So, at the business level, there are no restrictions even today.

China sometimes annoys India by restricting the supply of certain things.

Broadly, the business between India and China is roaring with $130-140 billion trade while it is around $180 billion with the US.

So, trade with China is good.

And with Russia, we buy one third of our crude oil from Russia. Oil imports from Russia was worth $60 billion last year.

You have to remember that while America was standing with our enemy all the time, Russia stood with us during all the wars.

Kindly note this image of nearly empty shelves in the cold medication section of a drug store in Brooklyn, New York, has been published only for representational purposes. Photograph: Brendan McDermid/Reuters

Harsh Goenka tweeted that the tariff imposed on India by the US would affect the MSME sector badly. So also the textile and pharma sectors.
When the MSME sector gets affected, jobs also will shrink, he said.

We expect Indian industry to pressurise the Indian government to make deals with the US even if it is bad for the country. That's because they will lose money.

The auto sector forced Japan to strike a deal with Trump sacrificing the agricultural sector.

The same thing happened in the EU too.

But it cannot happen in India because agriculture is the livelihood in India.

I want to stress another fact here. Our exports are just 20% of our GDP. And exports to the US are 18% of our total exports. The merchandise exports to the US is only 3% to 4%. If 25% of that comes down, I don't think we will notice the impact.

Of course, pockets of the top industries will become lighter. But I don't think there will be any problem at the factory level.

I feel there is no reason to worry. We are not going to lose the US market. Of course, there will be some adjustments in some sectors.

IMAGE: Ajay Srivastava

You said earlier that the US would not be able to survive without products from China. Similarly, do you feel they need certain products from India also?

Of course. 90% of doctors' prescriptions contain generics from India.

They need our pharma products. That's why they order them. That's why we supply.

Ultimately, Trump is making things expensive for American people.

Because India did not budge to Trump's bullying in trade negotiations, he has slapped 25% tariff on Indian products.
Do you think hereafter, other countries may follow India's way of standing firm to safeguard their domestic sectors?

I am happy you asked this question. I am sure the message must have gone very clearly to the world.

When big powers like the EU and Japan sacrificed their agriculture in front of Trump, India stood up. China stood up.

What India has done will surely embolden more countries to stand up to Trump as they have India and China as clear examples in front of them.