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New Delhi: India is bracing for the impact of new US tariffs, with experts warning of the economic and political consequences of an unprecedented duty on exports, marking one of the highest tariffs the US has ever imposed on a major trading partner.

In an unexpected move last week, US President Donald Trump imposed an additional 25 percent tariff on Indian goods, citing New Delhi’s purchases of Russian oil. His Deputy Chief of Staff Stephen Miller said the oil imports amounted to “financing” Russia’s invasion of Ukraine.

The move increased the total duty on Indian exports to 50 percent. While India’s Ministry of External Affairs vowed to “take all actions necessary to protect its national interests,” experts do not see much room for negotiations, as the tariff regime is set to take effect next month.

“It will have economic repercussions if things are not changed. Fifty percent is a lot, and it will affect us. Right now, there is an exemption for pharmaceuticals, but in other areas, there will be an impact,” Manoj Joshi, distinguished fellow at the Observer Research Foundation, told Arab News.

“We don’t have much leverage. We don’t have many options. The US is the one taking these actions, so unless and until the US withdraws these taxes, there is not much India can do.”

The US and India have been in tariff talks since the beginning of the year, in the wake of the US ongoing global tariff campaign. Prime Minister Narendra Modi made a personal visit to Washington, D.C., in February to meet Trump and discuss strengthening bilateral ties, trade relations, and the procurement of new US weapons and aircraft.

In April, the Trump administration imposed a 25 percent reciprocal tariff on Indian goods in response to India’s continued purchases of Russian oil and to rectify trade imbalances. A new deal was expected in July, but Trump did not approve it, leading to a breakdown in talks.

The US threatened to increase tariffs on India if it were not given broader access to several key sectors, including automobiles, steel, aluminum, and dairy products — a concession New Delhi resisted.

“India is not going to compromise on agriculture and dairy products. India will find it very difficult to stop buying Russian oil. There is not much room for any kind of concessions from India’s side,” Joshi said.

The US is India’s largest export market, accounting for 18 percent of its exports and 2.2 percent of its gross domestic product. The latest estimates by Indian economists suggest that the new tariff could reduce GDP by 0.2 to 0.8 percentage points.

It could also have an impact on India’s global standing.

After emerging as a new superpower when it hosted the G20 Summit in 2023 and over the past few years betting everything on its strategic partnership with the US, India may now be forced to recalibrate its relations, including with its rival China.

India is a member of the QUAD — Quadrilateral Security Dialogue — a forum that also includes the US, Japan, and Australia and focuses on regional security and cooperation in the Indo-Pacific region.

India’s engagement with the bloc has increased in recent years, shifting from its earlier engagement with BRICS — a grouping that includes also Brazil, Russia, China, and Indonesia, and is the most powerful geopolitical forum outside of the Western world, accounting for 45 percent of the world’s population and 35 percent of its economy.

In the wake of tensions with the US, Modi is expected to visit China for a summit of the multilateral Shanghai Cooperation Organization and meet Chinese President Xi Jinping in late August. This will be his first official trip to China in over six years. The last visit took place before the 2020 Galwan Valley border clashes, which significantly strained India-China ties.

Modi’s office said on Saturday that he had invited Vladimir Putin to visit Delhi by the year’s end. It would be the Russian president’s first trip to India since December 2021.

“Consequences would be there so long as Trump is there. But the whole episode has exposed the leadership of India,” said Mohan Guruswamy, policy analyst specializing in economic and security issues.

“India has been ignoring its traditional allies. It has been pursuing QUAD and trying to appease the US, forgetting China and Russia. It has been pursuing the US and calling them strategic allies, and now the US has given it a shock.”

JERUSALEM/CAIRO: Israel’s far-right finance minister has demanded Prime Minister Benjamin Netanyahu scrap his plan to seize Gaza City in favor of a tougher one, while Italy said on Sunday the plan could result in a “Vietnam” for Israel’s army.
Netanyahu’s security cabinet, of which the minister, Bezalel Smotrich, is a member, approved the plan by majority on Friday to expand military operations in the shattered Palestinian enclave to try to defeat militant group Hamas.
The move drew a chorus of condemnation within Israel, where thousands of people protested in Tel Aviv on Saturday calling for an immediate ceasefire and release of hostages held by militant group Hamas, as well as abroad.
The United Nations Security Council was expected to meet later on Sunday to discuss the plan, with many countries expressing concern it could worsen already acute hunger among Palestinians.
Netanyahu was expected to give a news conference for international media in Israel and make a televised announcement later in the day. It was not clear what he would say.
Smotrich said he has lost faith in Netanyahu’s ability and desire to lead to a victory over Hamas. The new plan, he said in a video on X late on Saturday, was intended to get Hamas back to ceasefire negotiations.
The prime minister and the cabinet have decided to do “more of the same” he said, referring to the fact that Israeli troops have entered the city before and failed to defeat Hamas.
He and other far-right members of Netanyahu’s coalition argue that the plan does not go far enough while the army, which opposes military rule in Gaza, has warned it would endanger remaining hostages held by Hamas as well as Israeli troops.
Smotrich stopped short of delivering a clear ultimatum to Netanyahu.
Other far-right coalition allies of Netanyahu have also pushed for total military occupation of Gaza, the annexation of large swaths of the territory and the removal of much of its Palestinian population.
National Security Minister Itamar Ben-Gvir, who has made similar calls, told Army Radio on Sunday that the plan to take over Gaza City was a good one, as long as it was a first step.
The Israeli military has warned that expanding the offensive could endanger the lives of hostages Hamas is still holding in Gaza, believed to number around 20, and draw its troops into protracted and deadly guerilla warfare.
Italy said Israel should heed its army’s warnings.
“The invasion of Gaza risks turning into a Vietnam for Israeli soldiers,” Foreign Minister Antonio Tajani said in an interview with daily Il Messaggero.
He reiterated calls for a United Nations mission led by Arab countries to “reunify the Palestinian state” and said Italy was ready to participate.
The Security Council is likely to discuss the humanitarian crisis in Gaza and the prospect of its worsening if the Israeli plan goes ahead but there has so far been little appetite among Arab states to send their troops in.
Boy killed by airdrop
Israel has already come under mounting pressure over widespread hunger and thirst in the enclave, prompting it to announce a series of new measures to ease aid distribution.
The Israeli military said on Sunday that the contents of nearly 1,900 aid trucks were distributed last week from the Gaza sides of the Kerem Shalom and Zikim border crossings. A spokesperson was not immediately available to comment on the reported figure but the United Nations has said Gaza needs far more aid to come in.
On Saturday, medics said that a 14-year-old boy was killed by an aid airdrop that fell on a tent encampment in central Gaza. A video, verified by Reuters, that went viral on social media, showed the parachuted aid box falling on the teenager who, among many other desperate Palestinians, was awaiting food.
The Hamas-run Gaza government media office said the new death raised the number of people killed during the airdrops to 23 since the war began, almost two years ago.
“We have repeatedly warned of the dangers of these inhumane methods and have consistently called for the safe and sufficient delivery of aid through land crossings, especially food, infant formula, medicines, and medical supplies,” it said.
Five more people, including two children, died of malnutrition and starvation in Gaza in the past 24 hours, the health ministry said, taking the number of deaths from such causes to 217, including 100 children.
The war began on October 7 2023 when Hamas-led militants stormed into southern Israel and killed 1,200 people, and took 251 hostages. Israeli authorities say 20 of the remaining 50 hostages in Gaza are alive.
Israel’s offensive in Gaza has since killed more than 61,000 Palestinians, according to health officials, and left much of the territory in ruins.
Gaza medics said Israeli fire killed at least six Palestinians on Sunday, four of them in an airstrike in Khan Younis and two more people among crowds seeking aid in central Gaza. The Israeli military did not immediately comment on the report.