Congress MP Shashi Tharoor said the US demands, in terms of the trade talks, have been unreasonable. He said India cannot afford to put the livelihoods of 700 million people dependent on agriculture at stake. Tharoor also said just because India is a huge market, does not mean the buyers can afford American goods.

“It is a very serious matter for us for a number of reasons. Twenty-five per cent plus an unspecified penalty for our buying oil and gas from Russia, it could take it up to 35 per cent or 45 per cent…we don’t know how much. There’s even talk of a 100 per cent penalty. We should then destroy our trade with America,” said Tharoor to reporters outside the Parliament. 

Tharoor acknowledged that Trump’s 25 per cent tariff plus penalty threat could also be a “bargaining tactic” as the trade negotiations are still underway. “And therefore there is a possibility that in the course of the negotiations, this may come down. If it doesn’t it will certainly damage our exports because America is a very big market for us. Our exports alone are $87-90 billion. So if there is a dramatic drop, that will hurt us. Some estimates are already coming that we might end up losing half a percentage of GDP if we don’t have the American market,” he said.

“On the other hand if their demands are completely unreasonable, negotiators have every right to resist. For example, we have about 700 million Indians who are dependent on our agriculture. We cannot risk their livelihood to make America happy. America has to understand our needs as well. Actually our tariffs on America are not that unreasonable, it’s 17 per cent average,” he said, adding that American goods are not priced so competitively to be sold in the Indian market. 

“If Mr Trump thinks ‘bade bade market hai’ we can sell a lot of things, then they will have to look at their own prices too. Are they competitive? Most of the things they want to sell are manufactured goods, which are cheaper from other suppliers. Everyone will buy what they can afford to buy. This also the Americans have to realise,” he said.  

Tharoor said India could possibly show some flexibility but there’s a limit to that concession as well. “Everything depends on the ongoing negotiations. I wish our negotiators good luck and good courage because we can’t afford to buckle under. We have to keep our national interests as number one in our minds,” he said. 

Donald Trump announced a 25 per cent tariff on all goods imported from India as well as an additional unspecified penalty related to India’s purchases of Russian military equipment and energy. In a social media post, Trump described India’s trade policies as “most strenuous and obnoxious.” He stated that India would be paying the tariff and penalty starting from August 1.

Throughout the day, Trump spoke several times about the tariffs imposed by India. He also referred to India’s membership in the BRICS group, which includes Brazil, Russia, India, China, and South Africa, calling it “anti-US.”