Can India Retaliate Against Trump’s 50% Tariffs?

US President Donald Trump’s recent imposition of 50% tariffs on Indian goods has heightened trade tensions, with India weighing its response options carefully to avoid escalation. The tariffs, which took effect on August 27, 2025, were announced by Trump in retaliation for India’s continued purchases of Russian oil, further straining US-India relations that have been deteriorating over trade issues. Economic analysts estimate that the 50% tariffs could reduce India’s GDP by up to 0.8% and slash exports to the US by approximately $35 billion in the current financial year. Key sectors like textiles, gems, jewelry, and leather are at risk, potentially affecting hundreds of thousands of jobs. Instead of immediate retaliation, India has pursued diplomatic maneuvers. Prime Minister Narendra Modi has engaged with Chinese President Xi Jinping and Russian President Vladimir Putin, seeking to strengthen ties as a counterbalance to US pressure. Experts caution against tit-for-tat measures. Ashley Tellis of the Carnegie Endowment noted that retaliation would be costly for India due to its greater economic dependence on the US market, where Indian exports are nearly three times higher than US exports to India. The legality of Trump’s tariffs is also in question. A federal appeals court recently ruled many of them illegal, though they remain in effect pending a Supreme Court review. Trump has pledged to appeal, adding to the uncertainty in global trade dynamics. India is exploring alternatives such as diversifying export markets to countries like Mexico, Canada, and China. Commerce Minister Piyush Goyal has indicated progress on trade deals, including with the European Union, to reduce reliance on the US. However, market diversification presents challenges. Trade expert Srividya Jandhyala points out the difficulties and costs for exporters in establishing new partnerships and adapting products, especially amid ongoing tariff uncertainties. Moving forward, India needs to enhance domestic competitiveness through technology upgrades and support for exporters. The government is urged to act swiftly to prevent loss of market share to competitors like Bangladesh and Vietnam, while navigating the complex trade landscape.