While the 50% price impasse continues, is reprisals an option for India?

The 50% prices of US President Donald Trump on India entered into force on August 27. Until now, rather than retaliation, India has proposed a geopolitical response carefully orchestrated to report its dissatisfaction in the United States.

There was the highly publicized attempt to bring together China, and striking images of Prime Minister Narendra Modi sharing a Limousine trip with Russian President Vladimir Putin have splashed the media from the touch of a security forum in Tianjin.

At the national level, Modi has announced aid to exporters in difficulty and there are tax reductions on anvil to alleviate the impact on exports.

But Delhi finds himself in an uninvable place. The price impasse with its greatest trading partner continued much longer than expected, the trade negotiations with Washington stopped and the links already damaged was more with daily warnings of US officials.

The repercussions are important.

Prolonged prices of 50% could shave up to 0.8% of India GDP, according to certain estimates.

India exports to the United States could drop up to $ 35 billion (26.1 billion pounds sterling) this exercise and put hundreds of thousands of jobs in key industries such as textiles, jewels and jewelry and leather at risk.

Pushed to the edge, the question that some are asking is whether Delhi Ripostera? And if not, what are his less damaging options?

If the past is a precedent, India has not moved away from reprisals. He imposed steep prices on some 28 American products, including almonds and apples in 2019, when Washington had refused to exempt the country from higher taxes on steel and aluminum.

But this time, the escalation of the trade war will not be in the interests of India, say experts.

“Reprisals are a very expensive and unproductive strategy because in the end, India depends more on the United States than the case upside down,” the Endowment for International Peace, the Wire Portal in an interview.

At 86 billion dollars, exports of goods from India to the United States is almost three times higher than exports of American goods to India.

The symbolic responses of India “in support of a multipolar world”, including the deepening of engagement with Japan, China and Russia, have been of wise movements, said Ajay Srivastava of the global Delhi -based global research initiative, said that the BBC, adding that direct reprisals at this stage would be premature.

“India is expected to wait at least six months to assess the full extent of American shares – not just 50% tariffs but also all additional measures that can follow, given the unpredictability of Trump and his advisers,” said Srivastava.

Delhi does not need to look further than his biggest northern neighbor to understand what Tit-For-Tat commercial measures can potentially do. China prices reached around 150% when Beijing slapped reprisal tasks.

India should also be wary, according to some experts, of increasing prices in the United States to non-Efficient fields such as services, digital trade and outsourcing in the event of climbing. These represent 6% of the GDP of India.

The US Secretary of Commerce Howard Lutnick has already warned against the changes in H1B non -immigrant visas, 70% of which are used by the Indians, indicating that the impact of the tense geopolitical links has transcended trade.

So, given that the risks of reprisals are clearly very high, what are the next best options in India?

The best stamp against the risk of American prices will be to diversify the export markets, say experts.

It is time for India to “cultivate economic and diplomatic ties with countries like Mexico, Canada and China.

Srivastava agrees. The use of diplomatic coalitions and the diversification of exchanges is the best bet in India to “put pressure” on Washington, he says, keeping the possibility of targeted reprisals only as a last resort.

There are already indications that Delhi has actively worked to accelerate other commercial pacts.

After having signed a complete agreement with the United Kingdom in July, the Indian Minister of Commerce, Piyush Goyal, said that the India-UE free trade agreement was in advanced negotiation stages.

But diversification will not be a rapid solution.

“For an individual exporter, it will be much more difficult to find new customers in the markets where they had previously had no partnerships, customers or relations,” a Singapore -based expert in Singapore.

Another challenge for Indian exporters will be the costs of passing through new markets.

“If new customers or customers need ranges of specialized products, machines, equipment or components, Indian exporters must decide whether it is worth it to invest in this when there is a high degree of uncertainty on future prices,” said Jandhyala.

In the longer term, there will be no option to find new business partners given the mercurial nature of Trump policies, say experts.

Mr. Srivastava says that the government must accelerate the diversification of markets on a war sidewalk by doing things like the management of trade missions specific to the sector with alternative markets and by establishing export centers in countries such as water and Mexico to bypass the high American prices.

And now more than ever, “domestic competitiveness must be reinforced urgent thanks to the technology and the quality upgrade funds” for exporters, he says.

Otherwise, India will also give in export market exports to other Asian peers such as Bangladesh and Vietnam, which are currently benefiting from relatively better commercial conditions with the United States.

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