New Delhi – July 31, 2025
A growing diplomatic rift between Washington and New Delhi has triggered strong political criticism and financial instability in India after US President Donald Trump threatened to impose a 25% tariff on a range of Indian exports.
The Indian opposition condemned the government’s foreign policy approach, labelling the move as a significant diplomatic failure. “This is the result of a performative, short-sighted foreign policy that has prioritized headlines over substance,” said a spokesperson for the Indian National Congress. “India’s global standing is at risk.”
The tariff threat has already shaken investor confidence. The Indian rupee fell sharply against the US dollar on Wednesday, while benchmark equity indices slipped as traders reacted to the prospect of escalating trade tensions with one of India’s largest partners.
Export-driven sectors such as textiles, pharmaceuticals, and automotive components could face immediate pressure if the tariffs are implemented. Industry leaders have called on the Indian government to respond decisively, with some urging urgent bilateral talks to de-escalate the situation.
“This isn’t just about trade. It’s about India’s credibility as a strategic partner in the global economy,” said Dr. Meera Raghavan, an international trade analyst based in Mumbai. “Investors and trading partners are watching closely.”
So far, the Ministry of External Affairs has not issued an official statement, but senior government sources indicate that backchannel negotiations are being considered.
The opposition has demanded a parliamentary briefing on the matter, warning that continued silence from the government could deepen economic uncertainty. Meanwhile, market analysts caution that unless diplomatic efforts show progress, the volatility is likely to persist into the next quarter.
The tariff dispute adds to a string of geopolitical and economic challenges facing India, even as the country prepares for a crucial G20 trade summit later this year.
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