'One way is to find alternative markets': Harsh Shringla on how India can offset US tariff impact

The former diplomat said New Delhi must find alternative markets to offset the impact caused by additional tariffs.

As the United States readies itself to implement the additional 25 per cent tariff on India, former foreign secretary and Rajya Sabha MP Harsh Vardhan Shringla offered a sound prescription to offset the impact of Trump's  tariff measures. The former diplomat said New Delhi must find alternative markets to minimise the impact caused by additional tariffs.

"We have Free Trade Agreements with Australia, the UAE, and the UK, we are close to concluding a Free Trade Agreement with the European Union. This means that we can access different markets and we would have the opportunity to divert some of our exports in that direction..." said in an address in Reston, Virginia.

The additional 25 per cent tariff on India announced by US President Donald Trump earlier this month are set to come into effect on Wednesday, August 27, taking the cumulative tariff on Indian imports to 50%. The additional tariffs on India were announced by Trump as a penalty for buying oil from Russia, a move that India has repeatedly called “unfair, unjustified, and unreasonable.”

Meanwhile, the Centre is pushing a ‘Swadeshi’ mantra to reduce the economy’s reliance on exports, with Prime Minister Narendra Modi calling on Indians to be “vocal for local” and buy Indian goods on Tuesday.

Indian exporters, however, are bracing themselves for a sharp fall in business to the U.S., with early estimates predicting that more than $47 billion worth of goods will face the 50% tariff rate. This includes the 25% tariff that Indian imports have attracted since August 7 plus an additional 25% tariff imposed as a penalty for India’s import of oil from Russia.

Elaborating on New Delhi's multi-faceted relationship with the United States, Shringla added: "We have the most comprehensive, multi-faceted relationship with the United States, the one that we have more than any other country...The strength of that relationship are the values and principles that we share, which will see us through any ups and downs in the relationship...".

On Monday, the US Department of Homeland Security issued a draft notice outlining plans to implement a 50 per cent tariff on products from India. With steep tariffs on India, Trump hopes to pressure his Russian counterpart Vladimir Putin into ending the war against Ukraine by trying to curb Moscow's oil trade.