Rahul Gandhi Calls Trump’s 50% Tariff “Economic Blackmail,” Warns PM Modi Against Buckling Under Pressure
Source: PTI VIA THE HINDU
New Delhi, August 6, 2025 (TheTrendingPeople.com): Tensions flared across diplomatic and economic circles on Wednesday as U.S. President Donald Trump levied a fresh 25% tariff on Indian imports — raising the total duty to 50% — under a new executive order penalising India over its continued purchase of Russian crude oil.
The decision sparked immediate backlash in India, with Leader of Opposition in Lok Sabha Rahul Gandhi branding it “economic blackmail.” He accused the former U.S. president of trying to “bully India into an unfair trade deal,” and urged Prime Minister Narendra Modi not to compromise national interests under pressure.
“Trump’s 50% tariff is economic blackmail — an attempt to bully India into an unfair trade deal. PM Modi better not let his weakness override the interests of the Indian people,” Gandhi said in a strongly-worded post on X (formerly Twitter).
Timeline of Escalation
- August 6, 2025 | Washington D.C.: President Trump signed an executive order titled “Addressing Threats to the U.S. by the Government of the Russian Federation”, placing an additional 25% tariff on goods imported from India effective August 7.
- The tariff comes on top of an existing 25% levy, taking the total duty to 50% on most Indian exports, except for a limited exemption list.
- US officials claimed the penalty was necessary as India continued importing discounted oil from Russia in defiance of G7 price caps — a move Washington says funds Moscow’s war in Ukraine.
- August 6, 2025 | New Delhi: Within hours of the announcement, Rahul Gandhi launched a political broadside at the Modi government, accusing it of risking economic sovereignty for “photo-ops and handshake diplomacy.”
Sectors in the Crosshairs
Exporters are bracing for a severe fallout, especially in:
- Textiles & garments — India’s largest labour-intensive export to the US.
- Marine products — Shrimp and seafood exporters fear loss of price competitiveness.
- Leather goods & footwear — Already battling slowing demand, now facing tariff shocks.
- Engineering & light machinery — Likely to see reduced orders.
Industry bodies warn that SMEs — which make up over 40% of India’s export workforce — may face layoffs and shutdowns if orders dip sharply.
“We were already coping with lower US demand post-pandemic. A 50% tariff will wipe out our margins completely,” said Prakash Mehta, a Surat-based textile exporter who supplies to American retail chains.
Why It Matters: Local and National Impact
Political Pressure at Home
The timing of the US action — just days after Parliament reopened for the Monsoon Session — has ignited a fresh round of political sparring in New Delhi.
Rahul Gandhi’s remarks are seen as an attempt to portray the Modi government as diplomatically cornered after its much-hyped “friendship” with U.S. leadership. Congress leaders have demanded the PM make a statement in Parliament on how India plans to respond.
Economic Risks
- India exports approximately $118 billion worth of goods to the US annually.
- Analysts estimate the tariff blow could impact $12–15 billion in Indian exports in the first phase.
- The move coincides with slowing domestic manufacturing and dipping private consumption in India — raising fears of job cuts in export hubs like Tiruppur, Moradabad, and Mumbai.
Background: Oil Politics at the Core
India has consistently defended its purchase of discounted Russian crude as a matter of energy security, especially after OPEC production cuts sent global oil prices soaring.
Despite US and EU pressure, New Delhi ramped up its Russian oil imports almost 11-fold since 2021, arguing that Western sanctions should not dictate sovereign energy policy.
The Trump administration, which has made re-industrialising America central to its economic doctrine, appears determined to test that stance.
Government’s Position (So Far)
As of Wednesday evening, the Ministry of External Affairs had not issued an official rebuttal, saying only that India remains “committed to protecting its economic interests and strategic autonomy.”
Commerce Ministry officials hinted that retaliatory measures, possibly targeting American agricultural and tech goods, are “on the table” but any final decision will be taken at the Cabinet level.
Privately, however, bureaucrats admit the situation may complicate ongoing India-US trade deal negotiations which aimed at reducing tariffs and enhancing technology transfers.
Eyewitness Voices
At Delhi’s bustling Okhla export hub, anger and anxiety intermingle among business owners.
“We survived the pandemic, then shipping container chaos, then inflation. This could be the knockout punch,” said Seema Arora, who employs 300 women workers in her handicraft unit.
In Lucknow, exporter Abdul Rashid said buyers in the US are already asking for “discounts or delayed shipments” following Trump’s order. “How do we survive cutting prices by another 20% just to keep orders alive?”
What Happens Next?
- India may approach the World Trade Organisation (WTO) to challenge the US tariff hike.
- Diplomatic back-channels with Washington are expected to intensify ahead of the next G20 Trade Ministers’ Meeting.
- With a sluggish global economy, both major Indian political players are watching how voters respond to the fallout — especially in manufacturing-heavy Hindi heartland states.
Final Thoughts from TheTrendingPeople.com
The escalating tariff war marks one of the most serious tests yet for India’s foreign policy tightrope walk between Moscow and Washington. As accusations of “economic blackmail” fly and political temperatures rise at home, Prime Minister Modi faces immense pressure to show that his global alliances bring protection — not punishment — for Indian workers and businesses.
India’s response in the coming days will be critical, not only to its exporters, but to its credibility as a sovereign power navigating a fast-shifting geopolitical landscape.