The US decision to impose 50% tariff on India is a big challenge for Prime Minister Narendra Modi on both diplomatic and economic levels. Till now, the “friendship” close to Modi and Trump has been considered to be the greatest power of Indo-US relations. But Trump’s strict decision showed that international trade relations are not based on friendship, but based on interests. If you mention the crisis that arises in front of India, then let us tell you that exports of about $ 60 billion (about Rs 5 lakh crore) will be directly affected, including labor-dominated areas such as textile, diamond-jewelry, shrimp and carpet. This can affect millions of jobs. Due to Trump’s tariff, countries like China, Vietnam and Mexico can replace India in the US market, there is a possibility of India’s GDP growth.
Global Trade Research Initiative (GTRI) estimates that exports in affected areas may fall by up to 70%, which will threaten millions of jobs. Economic analysts also believe that countries like China, Vietnam, Mexico, Türkiye and Pakistan can now replace India in American markets. In a long time, these countries can permanently grab the traditional market of India. Analysts also believe that India’s GDP was $ 4,270 billion in FY2025 and was likely to grow at a rate of 6.5% under normal conditions. But due to the decline in US exports, this baseline will decrease to $ 4,233 billion. As a result, the increase in FY2026 may decrease to 5.6% – ie decline by 0.9 percent.
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If seen, this step of Trump is definitely a shock for Modi, but Modi’s specialty has been that he turns the crises into opportunity. If India learns from this situation and brings diversity in its business relationships and strengthens the domestic market, then in the coming years this crisis can also become the basis of India’s economic self -sufficiency.
Now the question arises that if Modi will overcome the country from this crisis, then the answer is that the strategy has been created only when the confidence of the Prime Minister, Union Ministers and Government Officers is being seen. Let us tell you that markets are being diversified and new export opportunities are being discovered in Europe, Africa, Latin America and ASEAN countries. Also, domestic market is being strengthened through “Make in India” and “Wocal for Local”. In addition, the exercise to make a faster business agreements with the European Union and Gulf countries has begun. At the same time, special relief packages are expected to be given to Textile and James-and-Jewelery sector.
However, Trump’s move is immediately a big shock for India. But if the Modi government fasts on an alternative market and domestic incentive policy, then this crisis can also strengthen India’s economy of new direction and self -reliance.