Economic Coercion Accusation against Rahul Gandhi Shakes Parliament during Trump's 50% Custom Duties Announcement
The US has increased tariffs on Indian goods to a staggering 50%, escalating the trade conflict between the two nations. This move, announced in early August 2025, follows a series of trade-related frictions and complaints from the US about India's tariff and non-tariff measures, as well as Indian purchases of Russian oil.
Negotiations to resolve the conflict are ongoing but challenging. Both sides are cautiously exploring concessions, with India considering tariff reductions, offers related to US liquefied natural gas (LNG), and potential defense purchases to ease tensions. However, non-tariff barriers like Quality Control Orders (QCOs) continue to add complexity to the negotiations, as they require product certification and local testing, which the US criticizes as barriers.
The tariff increase has had a significant impact on India's marine and shrimp export industries. In 2024-25, India exported over $4.88 billion worth of shrimp, constituting 66% of total seafood exports, with US buyers accounting for more than 40% of this share. However, this year, the realignment could lead to a $1.8 billion contraction in India's seafood export revenue.
Congress has urged the Prime Minister's Office to retaliate with counter-tariffs on select US goods such as almonds, apples, and aircraft components. Rahul Gandhi, the Leader of the Opposition, has labelled the tariff as "economic blackmail" and accused the Modi government of failing to anticipate the tariff blowback.
The government has defended the purchases of Russian oil, citing national interest, energy security, and price stability, but the response from the US has placed India in a tight diplomatic corner. The opposition has accused the Modi government of playing second fiddle to the White House and urged it to defend economic sovereignty.
The ongoing trade conflict has sent ripples across India's political spheres, with the Congress-led opposition stalling proceedings in the Lok Sabha and holding placards demanding a government response to the tariff issue. The Congress has moved an adjournment motion demanding immediate deliberation on the issue in the Lok Sabha.
The situation reflects a strain in US-India trade relations and a possible strategic realignment, with geopolitical disagreements around Russia and South Asia complicating economic talks. The upcoming G20 Trade and Investment Working Group meeting in September is seen as a crucial opportunity for de-escalation.
Meanwhile, textile exporters fear losing market share to Bangladesh and Vietnam due to higher duties. The Rahul Gandhi economic blackmail charge continues to define the Opposition's political narrative, with the charge being repeatedly referenced during floor speeches and press briefings held outside the House.
Despite the challenges, India remains resilient. Exporters from states like Andhra Pradesh and Gujarat have reported an immediate suspension of contracts following the new tariff announcement, but smaller players are facing liquidity crises, with shrimp exports expected to drop by 30-35% this quarter.
References:
[1] The Economic Times
[2] The Hindu
[3] Business Standard
[4] Livemint
[5] The Indian Express
- The tariff increase on Indian goods by the US and the subsequent trade conflict are major topics of policy-and-legislation discussions, with Congress urging the Prime Minister's Office to retaliate and the opposition stalling Lok Sabha proceedings.
- The ongoing trade conflict between the US and India, involving policies like tariffs, non-tariff barriers, and defense purchases, has significant implications for various sectors, including marine, shrimp export, textiles, and general-news media.
