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Amitabh Kant on Trump Tariffs: India Must Use the 50% Trade Shock as a Reform Catalyst

Summary

  • Former G20 Sherpa Amitabh Kant calls the 50% US tariff a “once in a generation opportunity” for economic reform.
  • Trump’s move penalizes India for continued Russian oil imports and “non-monetary trade barriers.”
  • Key Indian exports including gems, textiles, and chemicals now face higher costs in the US market.

Amitabh Kant on Trump Tariffs: Strategic Pressure or Economic Breakthrough?

In a world increasingly shaped by hardline trade policy and shifting alliances, the recent escalation by the United States has put India on the edge of a new economic crossroads. President Donald Trump’s announcement of a steep 50% tariff on Indian goods—up from the 25% declared barely a week earlier—has sparked debates across boardrooms, ministries, and think tanks.

However, cutting through the noise of panic and outrage, a clear and strategic voice emerged: Amitabh Kant on Trump tariffs. India’s former G20 Sherpa and ex-CEO of NITI Aayog reframed the crisis not as a setback but as a transformative trigger. “Crisis must be fully utilised,” he declared in a post on X, urging the Indian establishment to see this penalty as a reform inflection point rather than a geopolitical punishment.

As India grapples with the implications of these tariffs, the spotlight now turns to whether this external shock could finally dismantle structural inefficiencies, unlock domestic potential, and make Indian exports truly competitive on the global stage.

As global supply chains evolve and protectionism resurfaces, voices like Amitabh Kant on Trump tariffs help shape a constructive national response rooted in resilience rather than retaliation.

Trade Shock and Tariff Breakdown

  • 50% duty applies to most Indian exports including textiles, gems, steel, seafood, and furniture.
  • New levies come in two phases: 25% effective August 7, and the remaining 25% after 21 days.

The July 30 announcement of a 25% tariff on Indian imports was already a significant blow. Trump’s rhetoric focused on India’s energy alignment with Russia and its so-called “obnoxious” trade barriers. But the follow-up announcement of a total 50% duty took many by surprise.

According to the Federation of Indian Export Organisations (FIEO), the added tariffs threaten over $48 billion worth of Indian annual exports. Items particularly affected include shrimp (India is the largest exporter to the US), organic chemicals, ready-made garments, and gems and jewellery.

Yet the focus across Indian policy corridors has swiftly shifted from protest to pragmatism, in no small part due to the framing of Amitabh Kant on Trump tariffs. His appeal is not for retaliation, but for internal reform that builds resilience.

Reform or Retaliation: What India Must Choose

  • Kant calls this a “once in a generation” opportunity to leapfrog trade competitiveness.
  • Analysts see potential for long-awaited tariff rationalization and export subsidy overhaul.

When a major external economic pressure surfaces, it often serves as a catalyst for internal transformation. Amitabh Kant on Trump tariffs offers precisely this lens. Rather than adopting a tit-for-tat approach, he stresses the importance of using this moment to rationalize India’s own tariff structures, simplify trade compliance, and enhance manufacturing capabilities.

India’s current average applied tariff rate, according to the World Trade Organization (WTO), is among the highest for major economies—hovering around 17%. Add to that complex documentation, high logistics costs, and inconsistent regulatory practices, and Indian exporters often find themselves at a disadvantage even in friendly markets.

Trump’s critique, while politically motivated, touches a nerve long acknowledged domestically. India’s “non-monetary trade barriers,” including restrictions on data, certification bottlenecks, and quality control norms, have made market access a maze for foreign players. Addressing these challenges would not only help India regain competitive ground in the US market, but also in global trade more broadly.

Beneath the Headlines: Energy, Defence, and Geopolitical Tensions

  • US penalizing India for being Russia’s largest energy customer in 2025.
  • Defence cooperation also under scrutiny as India continues reliance on Russian arms.

Much of the Trump administration’s fury stems from India’s continued energy and defence dealings with Russia. According to India’s Petroleum Planning and Analysis Cell (PPAC), over 32% of India’s crude oil imports in the first half of 2025 came from Russia. Despite Western sanctions and appeals to isolate Moscow, India has maintained its diversified energy portfolio.

Trump’s post on Truth Social criticized this bluntly: “India… has always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China… at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE.”

The message was clear. The 50% tariff is not just an economic penalty—it is a political warning. Yet, Amitabh Kant on Trump tariffs removes the emotion from this narrative and centers the policy conversation on internal strengthening. This, experts argue, could help India realign its trade strategies without compromising geopolitical independence.

These are precisely the nuances that Amitabh Kant on Trump tariffs urges India to analyze carefully, choosing structural strategy over political posturing.

Competitiveness and the India-US Trade Equation

  • US is India’s largest trading partner, with bilateral trade at $128.8 billion in FY 2024–25.
  • Indian exports rely heavily on access to the US consumer base.

According to the Ministry of Commerce & Industry, India’s total trade with the US in 2024–25 reached nearly $129 billion, with India maintaining a trade surplus. Key exports include IT services, pharma, and industrial products, which together represent the bulk of India’s overseas earnings.

Given this dependency, the Trump tariffs are more than symbolic—they bite into the heart of Indian export performance. However, Amitabh Kant on Trump tariffs offers a strategic mindset. It suggests India must now invest in productivity, global certifications, logistics infrastructure, and sectoral incentives that prioritize global scale.

This includes promoting plug-and-play manufacturing zones, streamlining export documentation through full digitalization, and revisiting older policies like the MEIS and SEIS schemes under WTO scrutiny.

India’s Next Moves: Policy Shift or Business as Usual?

  • Commerce Ministry evaluating targeted support to affected exporters.
  • NITI Aayog and DPIIT examining sectoral bottlenecks and supply chain risks.

While the government has not officially responded in combative terms, internal meetings are underway. The Ministry of Commerce is evaluating a “remission + productivity” model to support industries likely to face order declines. Meanwhile, the Department for Promotion of Industry and Internal Trade (DPIIT) is tasked with identifying sector-specific frictions.

The hope, according to supporters of Amitabh Kant on Trump tariffs, is that this crisis will accelerate the opening of protected sectors to global competition. The Production Linked Incentive (PLI) scheme, which has yielded mixed success so far, is also likely to be tweaked to reward exports, not just domestic output.

Final Analysis: Between Crisis and Possibility

In an age of hypernationalism and transactional diplomacy, India must choose how it responds—not just in policy, but in mindset. Amitabh Kant on Trump tariffs captures that rare moment where an external penalty could unlock internal power. If the country seizes this as an inflection point, it may not only weather the tariff storm but also emerge as a more efficient and competitive economy.

Whether New Delhi chooses to protect its industries or prepare them for global scale will define how history remembers this episode—not as a diplomatic defeat, but perhaps as a turning point in India’s export-driven ambitions.

For policymakers and economists alike, Amitabh Kant on Trump tariffs will likely serve as a case study in how to harness external shocks for long-term domestic transformation.

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