00:00Why are you singling India out for these additional sanctions?
00:03It's only been eight hours, so let's see what happens over the next, yeah, you're going to see a lot more.
00:09Could Trump's 50% tariff push India's economy into crisis?
00:14From tomorrow, Trump's imposed tariff on India could rise to 50%.
00:18Higher tariffs mean Indian goods become costlier, Indian traders are forced to raise prices,
00:25American retailers resist, and the demand supply chain gets disrupted.
00:30Welcome to Deep Dive with Outlook.
00:31Today, we'll discuss the looming threat of Trump's tariffs and the road ahead.
00:36The additional 25% penalty tariff comes in response to India's continued purchase of Russian crude oil,
00:44compounded by India's pushback on Trump's claims of brokering peace between India and Pakistan during Operation Sindur.
00:52However, critics believe that the rise in tariffs is a pressure tactic by Trump
00:57to seek wider market access in India, demanding tariff reductions on American products,
01:04from fruits and nuts to livestock feed and genetically modified crops.
01:09But accepting these demands could expose 85% of India's agricultural sector to U.S. competition,
01:17jeopardizing the livelihoods of millions of people and maybe even the nation's food security.
01:23A threat like this creates a massive economic ripple effect.
01:28In 2024, India exported $11.58 billion in gems and jewelry to the U.S.
01:36About 90% of Indian diamonds go there.
01:39So that is around 9 out of 10 diamonds.
01:42Dinesh Navadiya, president of the Indian Diamond Institute,
01:46says India can develop other markets.
01:48But it's not easy.
01:51Due to economic volatility, more than 80 diamond workers died by suicide last year.
01:57A massive tariff could just make a despairing situation that much worse.
02:03Textiles face similar pressure.
02:05Between 2023 to 2024, the U.S. imported $10 billion,
02:11roughly one in every $4 the sector earns internationally.
02:15And look how specific these exports are.
02:1970% of bedsheets, 50% of bath towels.
02:22They are reportedly all made specifically for American consumers.
02:27If the U.S. finds other suppliers,
02:29getting that market back would be incredibly difficult.
02:33If we zoom out, the overall impact could be massive.
02:36Research by the IMF suggests a 1% increase in Indian export prices
02:42reduces demand by 0.9%.
02:45And for manufacturing, the impact is even stronger with a 1.1% decline.
02:51The Global Trade Research Initiative estimates
02:54India's exports to the U.S. could fall nearly 30%,
02:58from $86 billion to $60 billion,
03:02worsening the youth unemployment crisis.
03:05Economist Santosh Mehrotra says,
03:07India must negotiate strategically.
03:10Why not demand that the U.S. import telemedicine services
03:14or recognize Indian medical degrees?
03:17We can play the same game as Japan and the EU.
03:21Nothing will materialize before Trump's term anyways.
03:25The impending tariff has already started influencing
03:29India's foreign policy.
03:31And diplomacy is in motion.
03:33External Affairs Minister S.J. Shankar's recent visit to Russia
03:38focused on trade expansion between India and Russia.
03:42The agreement included removing non-tariff barriers
03:46and boosting Indian exports to pharmaceuticals,
03:49agricultural and textiles.
03:52The Chinese Foreign Minister Wang Yi
03:55visited New Delhi a few weeks ago too.
03:58He held meetings with National Security Advisor Ajit Doval.
04:02Both are special representatives appointed to discuss border issues
04:06between the countries.
04:08Looking ahead, India's participation in the 25th Shanghai Corporation
04:13Organization Summit in Tianjin from August 31st
04:17signals a commitment to multilateral engagement.
04:21Academic Ravi Prasad Narayanan suggests,
04:24India, China and Russia are exploring economic cooperation,
04:28possibly even a common currency for trade,
04:31advancing the BRICS proposal as an alternative to the US dollar.
04:35As tariffs threaten trade with the US,
04:38are we watching India's economic resilience being tested
04:41or are we witnessing the map of world economics being redrawn?
04:46Read more on this in our latest issue.
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