Tariffs as ‘Peace Policy’? India Must Not Blink
By Sanjeev Oak
Washington’s attempt to dress up punitive tariffs on India as a “peace policy” for Ukraine is both audacious and absurd. This is not trade strategy but coercive diplomacy—and New Delhi’s answer must be firm, defiant, and rooted in strategic autonomy.
The Trump administration’s claim that slapping punitive tariffs on India is somehow a step toward “peace in Ukraine” stretches both law and logic. What began as an economic measure has been recast as strategic coercion. For New Delhi, the answer cannot be hesitation; it must be calibrated defiance.
“To call tariffs a peace instrument is to weaponise trade law as foreign policy fiction.”
A Legal Gambit, a Geopolitical Smokescreen
Washington has rushed to the U.S. Supreme Court, desperate to preserve a tariff regime already declared illegal by a federal appeals court. The appeal dresses up tariffs under emergency powers, but the real aim is leverage—forcing partners like India to bend on Russia.
For India, this is less about legality in Washington’s courts and more about principle: a sovereign nation cannot be punished for exercising its strategic autonomy.
“New Delhi will not allow American judges to decide its oil contracts.”
India in the Crosshairs
India faces a punishing 50% tariff on goods routed to the U.S.—25% for so-called trade imbalance, and another 25% penalty for Russian oil purchases. The message is clear: Washington wants India to choose sides in Europe’s war.
But that is a false binary. India’s energy decisions flow from national interest, not American political expediency.
“A democracy that imports oil from Russia for its poor is lectured by a superpower that buys Russian uranium for its reactors.”
Strategic Response: Three Clear Tracks
1. Diversify, Don’t Depend
India must fast-track diversification. The EU FTA, GCC markets, Africa and Latin America are natural buffers. If Washington wants to close one door, New Delhi has the leverage to open five others.
2. Lawfare with Diplomacy
WTO challenges, targeted reciprocity, and lobbying for carve-outs through U.S. industry groups can put pressure back on Washington. India has successfully played this game before—exemptions are won, not gifted.
3. Political Message
New Delhi must make it clear: coercion cannot dictate foreign policy. Trade cannot be weaponised to rewrite India’s stance on Ukraine.
“Tariffs cannot be America’s veto on India’s diplomacy.”
Sectoral Stakes: Where the Blow Will Land
- Engineering & Auto Components: Immediate pain from price-sensitive U.S. buyers, but strong potential to pivot to Europe and Mexico with supply-chain relocation.
- Textiles & Apparel: Short-term losses likely, yet India’s scale and sustainability edge make it a strong player in the EU.
- Pharma: Generics are too critical to U.S. healthcare to remain hostage to tariffs; lobbying power here is immense.
- Gems & Jewellery: Margin-sensitive but relocatable to Dubai and EU.
- Agri-exports: Basmati and mangoes may suffer, but GCC and Asian markets are more natural homes.
- IT & Services: Not tariff-bound, but politically exposed; India must prepare for visa or procurement pressure as collateral damage.
“America may raise tariffs, but it cannot replace India’s scale, skills and supply chains.”
Counter-Punch: Why India Holds Leverage
- Energy Security: India buys oil from Russia not to undermine peace, but to stabilise fuel costs for its billion-plus citizens.
- Market Access: American tech and retail giants thrive in India’s market. If tariffs escalate, reciprocity is not off the table.
- Strategic Balance: In a fragmented world, Washington needs India more than India needs punitive lectures.
“The U.S. is playing courtroom politics; India is playing the long game of strategic autonomy.”
Bottom Line
India must read these tariffs for what they are: political arm-twisting disguised as peace policy. A Supreme Court judgment in Washington may decide legality, but it will not decide India’s choices. New Delhi must defend its exporters, diversify its markets, and send an unmistakable signal—strategic autonomy is not negotiable.
“Tariffs will come and go. What remains is India’s refusal to be bullied into America’s wars.”