New Delhi [India], August 6 : Foreign affairs expert Subhash Goyal has criticised US President Donald Trump's decision to impose an additional 25 per cent tariff on India over its purchase of Russian oil, warning that the move will damage trade ties and hurt both Indian and American consumers.
"Look, India and Russia have a very old relationship. And Russia is a trusted friend of ours. If we're importing oil from Russia, the reason for that is that we have to look at our oil security in our agriculture sector and transport sector. And it is not that we are doing it only through Russia, but we are doing it from 10-15 countries. And the European Union is also doing it through Russia in a large number, but all the sanctions are being imposed on India," Goyal told ANI.
"So, I don't understand what the strategy is, but this will cause a lot of loss to our exports. Our exports are more than $100 billion, and our exports will be reduced by at least $30-40 billion. And the sectors like electronics or steel, which already account for 50% of our exports, will not be affected so much. Or if they are excluding pharmaceuticals, then it will not be affected so much. But still, our neighbouring countries like Bangladesh, Sri Lanka and Vietnam will be subject to 10% tariffs. Singapore also has a 10% tariff. So, either our exporters will have to route through there. And more than us, the American industry and the American consumers will be more affected," he added.
Goyal stressed that the US depends significantly on Indian goods and services, including in the technology sector. "Because, look, today there are medicines and other things which a lot of industry depends on Indian goods. Our software industry, all their technology, at this time, 30-50% are of Indian origin. Whether it is Microsoft, Google, Apple, or any big company, they have a lot of software development and manufacturing units in India. So, what will happen with this is that America is pushing India towards Russia and China," he said.
Highlighting the geopolitical implications, he added, "Because, in Asia-Pacific, India was a partner of America, which was a balance, which was reducing China's influence in Asia-Pacific. So, India was countering it. So, for so many years, American diplomacy has increased relations with India, joint military exercises have taken place. So, all those things will go on the back burner. And I think that American consumers will start protesting."
Citing the impact on tourism and bilateral relations, Goyal said, "Because, look, now the tourists in America -- first the tourists from Canada used to come. First they upset Canada, so the tourists from Canada stopped coming. They upset Europe a lot, so the tourists from the European Union stopped coming. And because of the war in Europe, the condition of America is a bit worse. So, the tourists from India will also stop coming. Because India's visa is waiting for a year. And Indian tourists will also go there, because businessmen combine tourism and business."
On the trade front, he said, "And if there is no business in America, they say that necessity is the mother of invention. So, we will have to find new markets. There are markets in South America, Africa, Japan, Australia, Asian countries. And we will have to increase our trade with China and Russia. So, we have just signed a favourable trade agreement with the UK. So, I think this geopolitical situation is changing the world. And in this, India will definitely lose exports. But more than us, America and America's goodwill are losing."
He added, "Look, there will be a short-term difference in tariffs. But in the long term, our products are good. We will get more markets. And there are more than 200 countries in the world. America is only one country. Okay, America's economy is our largest importer, but this does not mean that we will be completely dependent on America."
Criticising Washington's trade policy, Goyal said, "America is kicking its feet because America's influence in the world is decreasing with tariffs. Now, in retaliation, we will also impose tariffs on American products. So, this is a trade war. Trump is starting tariffs all over the world. And this is not good for international trade and peace in the world. So, I pray to God that good sense will prevail. And now, there is going to be a delegation from America for trade negotiations. And I hope that in those trade negotiations, mutually beneficial tariffs will be decided."
Echoing criticism of the move, the Ministry of External Affairs (MEA) on Wednesday termed the United States' decision to impose additional tariffs on India over its oil imports from Russia as "unfair, unjustified and unreasonable," asserting that New Delhi will take "all actions necessary to protect its national interests."
In an official statement, the MEA said, "The United States has in recent days targeted India's oil imports from Russia. We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India."
"It is therefore extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest," the statement added.
"We reiterate that these actions are unfair, unjustified and unreasonable. India will take all actions necessary to protect its national interests," the MEA stressed.
This came after US President Donald Trump on Wednesday signed an Executive Order imposing an additional 25 per cent tariff on imports from India.
According to the order issued by the White House, Trump cited matters of national security and foreign policy concerns, as well as other relevant trade laws, for the increase, claiming that India's imports of Russian oil, directly or indirectly, pose an "unusual and extraordinary threat" to the United States.
After the order, the total tariff on Indian goods will be 50 per cent. While the initial duty becomes effective on August 7, the additional levy will come into effect after 21 days and will be imposed on all Indian goods imported into the US, except for goods already in transit or those meeting specific exemptions.
The Executive Order also allows for modifications based on changing circumstances, including potential retaliation by other countries or steps taken by Russia or India to address the national emergency.
"Accordingly, and as consistent with applicable law, articles of India imported into the customs territory of the United States shall be subject to an additional ad valorem rate of duty of 25 per cent," the order stated.
"This rate of duty shall be effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time 21 days after the date of this order, except for goods that (1) were loaded onto a vessel at the port of loading and in transit on the final mode of transit prior to entry into the United States before 12:01 a.m. eastern daylight time 21 days after the date of this order," the order added.