India's options against US' tariff bullying.

The US had slapped a punitive 25% tariff for continuing to purchase Russian crude oil. Trump has taken the penalty to 50%. The timing and ferocity of the second tranche of punitive tariffs has taken the government by surprise but its pushback to what it has dubbed "unfair, unjustified and unreasonable", has been startlingly strong. 

Other actions by us

* Put on hold its plans to procure new US weapons and aircraft. Consequently, Rajnath Singh's trip to

   the US has been put off.

* No indication that Indian oil companies have been asked to go slow on Russian oil purchases.

* US-India trade talks have been aborted. This has dashed hopes that there could be an interim deal

   before the punitive tariffs kick in on 27 Aug.

A painful cut

* The US is India's largest trading partner to whom we export $87 billion worth of goods. An additional 

   25% tariff could cut GDP by 0.2-0.4%, risking growth slipping below 6% this year.

* For large swathes of the industry, it's curtains. Effectively, we're facing a US trade embargo.

   - The gems and jewellery industry, which exports 45% of its polished gems and other products to the

     US  has suspended further shipments.

   - The textile and apparels industry has stopped exports having been edged out by Bangladesh and 

     Vietnam. The tragedy is that most of these export units are MSMEs which are highly labour

     intensive.

* The deal breaker seems to be US' insistence on access to India's agricultural and dairy markets. and

   they want to flood our markets with genetically modified corn and wheat.

How does India overcome this sort of bullying

* India's foreign policy might see a more prominent shift away from the 'soft' middle-of-the-road-line

   with a pro-US tilt.

* Healing of relations with China as the PM embarks to attend the Shanghai Co-operation Organisat-

   ion in end-August.

* An imminent Putin-visit to India.

* Widely publicised Modi-Lula (President of Brazil), one-hour phone talk.

Alternative partners

* BRICS alliance must take on US domination.

* FTA with the ASEAN.

* Creation of multi-lateral economic partnerships as an alternative to US domination.

* And meanwhile pursue negotiations with the US for a fair trade deal.

My take

Tough yet exciting times ahead! Hope it doesn't stunt our economic growth!!

Tailpiece.

A quiet Sunday.

Changed bed linen and carried out washing machinex.

PS.

My classmate from Sainik School, K Venugopal (Roll no.320) passed into the mist of time this evening. Details are awaited; his funeral will be at Perumbavoor, his ancestral place! My tears and prayers!! Om Shanti! Sadgati.