Prime Minister Narendra Modi has urged Indians to opt for homegrown products as the coutry’s industries come under threat from U.S. President Donald Trump‘s steep tariffs.
During a speech on Monday, translated by Indian news outlet Firstpost, Modi encouraged citizens to adopt the “mantra” that whatever they purchase must be “made in India.”
“I appeal to the citizens of our country to prioritize purchasing goods that are made in India,” Modi said. “Whether it’s decorative items or gifts, let us choose products manufactured within our own nation.”
Modi has repeated these comments in several speeches over the past few days, while also urging businesses to display “made in India” signs outside stores, the BBC reports.
Newsweek contacted the White House via email outside of regular hours on Wedneday.
Why It Matters
Modi’s remarks follow President Trump’s decision to raise tariffs on India to 50 percent, partly in response to the country’s continued purchase of Russian oil. These duties—among the highest imposed on any of America’s trading partners—have spooked the Indian economy, and put in doubt the future of their bilateral trade, which totaled $212 billion last year, according to the U.S. Trade Representative.
What To Know
India was considered a strong early contender for a trade deal with the U.S.
The country’s External Affairs Minister Subrahmanyam Jaishankar told Newsweek in June that he was optimistic about this possibility, and President Trump later hinted that such an agreement was imminent.
However, following several rounds of unsuccessful negotiations, Trump announced he would be placing a 25 percent duty on its goods beginning in August, as part of the broader reinstatement of his reciprocal tariffs originally unveiled in April.
On August 6, the president signed an executive order stacking a further 25 percent tariff on India for “directly or indirectly importing Russian Federation oil,” which brought the country’s total rate to 50 percent.
These new tariffs—which New Delhi dubbed “unfair, unjustified and unreasonable”—took effect on Wednesday, and have sent Indian industries into a tailspin given the U.S. is the country’s largest export market. Key Indian exports to the U.S. include telecommunications instruments, drugs and pharmaceuticals, petroleum products, textiles, gems and jewelry.
A brokerage firm told the BBC the new tariffs effectively amount to a “trade embargo” on Indian goods that “will lead to a sudden stop in affected export products.” One textile factory owner told the outlet that the duties had prompted him to put expansion plans on hold and could threaten to sink his entire business.
In an effort to skirt the tariffs, Indian diamond exporters have also proposed sending goods to Dubai before shipping these to the U.S., according to the International Diamond Exchange (IDEX). However, the U.S. has clarified that duties will depend on the “country of origin,” barring any transshipment of this kind.
“You already saw Indian producers saying: ‘It’s ok, we’re going to ship it through Dubai cause that’s only a ten percent [tariff],’” international diamond industry analyst Ya’akov Almor told Newsweek. “That’s not how it works; the way tariffs are defined you cannot do that.”
What People Are Saying
Indian Prime Minister Narendra Modi, in a speech this week, said: “My government will never allow any harm to come to small entrepreneurs, farmers and animal keepers. No matter how much pressure we face, we will continue to strengthen our ability to withstand it.”
President Donald Trump, in a post to Truth Social on August 4, wrote: “India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don’t care how many people in Ukraine are being killed by the Russian War Machine. Because of this, I will be substantially raising the Tariff paid by India to the USA. Thank you for your attention to this matter!!!”
Indian Foreign Minister Subrahmanyam Jaishankar said at an Economic Times forum event in New Delhi on Saturday: “If the argument is oil, then there are [other] big buyers. If argument is who is trading more [with Russia], than there are bigger traders.”
Hudson Institute fellow Bill Drexel and Nikki Haley, former South Carolina Governor and U.S. Ambassador to the United Nations, wrote last week: “The U.S.-India relationship is at a troubling inflection point. To achieve the Trump administration’s foreign policy goals—outcompeting China and achieving peace through strength—few objectives are more critical than getting U.S.-India relations back on track.”
“In the short term, India is essential in helping the United States move its critical supply chains away from China,” they added. “While the Trump administration works to bring manufacturing back to our shores, India stands alone in its potential to manufacture at China-like scale for products that can’t be quickly or efficiently produced here, like textiles, inexpensive phones, and solar panels.”
What Happens Next?
A meeting between negotiators planned for this week had been indefinitely postponed, Reuters reported on August 16, but an anonymous Indian government official told the outlet that recent discussions had yielded “hopes of a breakthrough.”
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