Dairy diplomacy and back channel conversation …. What is India’s plan to deal with Trump’s tariff threat?

US President Donald Trump has once again threatened to impose more than 25 per cent tariffs on India on Tuesday (5 August 2025). The trump says that India is promoting the ongoing war in Ukraine by helping Russia. He said that even if he offers zero tariffs on American goods, it will not be enough because he is earning a lot of profit by buying Russia oil.

These regions of India will be affected

The announcement of Trump’s tariff may affect India’s textile, engineering, seafood, chemical, leather exporters. Not only this, the pending trade deal between the two countries can also be very affected by this. Due to sudden increase in tariff from the US, the crack between the two countries has become even deeper.

‘India’s GDP growth may decrease’

According to a report by Bloomberg, HSBC economist Pranjul Bhandari claimed that 25 percent of tariffs could reduce India’s GDP growth by 0.3 per cent. The Ministry of Commerce estimates that this type of tariff will reduce India’s exports between July and September by about 10 percent. India has a threat to about half of US dollars of US $ 85 billion.

India’s Foreign Ministry bluntly said that the countries who are criticizing India, they are doing business with Russia themselves for buying oil from Russia. The Ministry of External Affairs said, “The European Union traded a 78 billion euro with Russia in the year 2024, including 16.5 million tonnes of LNG.”

Dairy diplomacy and back channel interaction

According to a report by Bloomberg, India can give an entry into a limited dairy market by making an important policy change. America has been demanding this for a long time. This will be a big concession for America because India did not allow Britain to do so in a free trade talks (FTA).

Russia gave advice to American amidst Trump’s frequent tariff threats. Russia said, “It is illegal to force any country to close trade with Russia. Such pressure against Russia’s business partners will be understood as a threat.”

National Security Advisor Ajit Doval and External Affairs Minister S Jaishankar are scheduled to visit Moscow. This also indicates that there will be no policy change, but there will be no inflammatory rhetoric against Washington.

Center’s plan for Indian exporters

According to an Economic Times report, the government is urging exporters to make a strong Indian brand, which can bear the shocks of tariffs and what the dependence on it can be reduced.

According to the report, an official said that it is important for Indian exporters to build and promote brand to come out of the clutches of any subsidy between American tariffs. Schemes related to it are being encouraged to maintain employment and capacity to areas like sea exports.