A former associate editor with the Times of India, Jug Suraiya writes two regular columns for the print edition, Jugular Vein, which appears every Friday, and Second Opinion, which appears on Wednesdays. His blog takes a contrarian view of topical and timeless issues, political, social, economic and speculative. LESS … MORE
Trump’s tariff blitzkrieg could prove to be a boon for the long-exploited Indian consumer
The tariff war that Trump has declared against the world has got govts across the globe scrambling to devise strategies to counter the US offensive, ranging from retaliatory taxes on American imports to submissively lowering their own import duties on Uncle Sam’s products.
New Delhi seems to favour the latter approach and is inclined to reduce the imposts it levies on US products, from chicken legs and apples to Harley Davidson mobikes.
As a result, Trump’s MAGA tariff bombshell could well have an unintended beneficiary, the long-exploited Indian consumer.
Even as the price of almost all products rises substantially in US, adversely affecting American buyers and customers, Indian consumers might end up paying less for a number of consumables, from Californian almonds to bourbon, the whiskey made in Kentucky, if under White House pressure New Delhi lowers its import duties, which range from 11% to as high as 60%.
India’s high tariffs have long been justified on the grounds of saving foreign exchange and promoting domestic production, both laudable aims. But such protectionist policies have ended up short-changing the Indian consumer by guaranteeing a virtual monopoly to domestic suppliers of everything from consumer durables to comestibles.
The enforced absence of competitiveness in price and quality has inevitably resulted in the Indian consumer having to pay more for second-rate products.
Pre-Trump 2.0, US tariffs were among the lowest in the world, at around 2% on manufactured goods, a point that the American president repeatedly thundered in high dudgeon, claiming that this has enriched countries such as India at the expense of America.
However, the low tariffs also benefitted American consumers, making them the most self-indulgent in the world. Now, if US increases its import duties and India lowers its, the tables could be turned at the expense of the US consumer and to the advantage of the Indian consumer.
