US tariff bomb increases pressure on Modi government

ISLAMABAD
A widely known business leader and former president of Islamabad Chamber of Commerce and Industry (ICCI) said on Friday that the imposition of an additional 25% US tariff on Indian exports could inflict irreparable damage to India’s economy and jeopardise Prime Minister Narendra Modi’s political future.
These tariffs have been imposed as a punitive response to India’s continued purchase of discounted Russian oil and its resale for profit. As a result, total US duties on Indian goods have now risen to 50%. According to Butt, the higher costs of Indian products will reduce their demand in the US markets, which will hurt India’s economic growth and increase unemployment.
In contrast, countries like Pakistan could seize the opportunity to expand their exports. He added that the US accuses India of supporting the Russian economy by purchasing oil in large quantities, indirectly supporting the war in Ukraine. He said that India has strongly criticized the US move, calling it unfair and unjustified.
However, economic indicators suggest the situation is serious. Butt noted that 55% of Indian exports could be affected by the new tariffs, particularly in sectors like textiles, leather, machinery, jewellery, pharmaceuticals, and agricultural products. Analysts believe this could push India’s GDP growth below 6% in 2025. In response to the crisis, India has initiated diplomatic efforts to limit the damage from the US decision.
Shahid Rashid Butt emphasized that instead of pursuing regional dominance or stubborn policies, India should shift toward peace, cooperation, and shared development across South Asia. Only then can the nearly two billion people of the SAARC region living in India, Pakistan, Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, and Sri Lanka hope for peace, prosperity, and long-awaited regional stability.
The coming weeks will reveal whether India’s leadership chooses confrontation or course correction. Either way, the economic and geopolitical consequences are likely to ripple across the region, affecting trade flows, alliances, and development priorities in a fragile global environment.