Starting this month, American consumers are shopping for Indian goods, and Indian exporters shipping to the U.S. will feel the sting of a new 25 per cent tariff slapped by the Trump administration. In a move framed as protecting domestic manufacturing, Washington’s latest trade salvo imposes up to 25 per cent duties on a range of Indian exports – including 25 per cent on certain textiles and auto components, and 10–15 per cent on categories like generic pharmaceuticals and machinery part But while headlines focus on diplomatic retaliation and political posturing, the real story here is about consumers, on both sides of the trade wall.
Whether it is a small apparel brand in Gujarat, a turmeric exporter in Erode, or a U.S. importer sourcing affordable generics from Hyderabad, this tariff hike doesn’t just punish trade, it punishes choice. Instead of a knee-jerk reaction, India should treat this moment as a strategic wake-up call. The global trading order is shifting fast. Protectionism is making a comeback under the “national interest” banner, but everyday people bear its actual cost. Consumers pay more, get less, and lose access to innovation. Take the example of Indian pharma. The US relies on India for 40 per cent of its affordable and high-quality generic medicines, a lifeline that keeps drug prices affordable for millions. With a 25 per cent tariff, those prices could spike, leaving American consumers and insurers to pay significantly more for basic medicines.
That’s bad business for both sides. Or consider Indian textile SMEs that export cotton garments to U.S. retailers. These businesses already operate on razor-thin profit margins. A 25 per cent tariff could render them uncompetitive overnight, leading to lost orders, layoffs, and reduced production. And American retailers won’t absorb the shock; they’ll pass it down to consumers through higher prices. This is the domino effect of protectionism: fewer options, higher prices, and stalled innovation. That’s bad news for anyone who cares about affordability and variety, whether buying shoes in Chicago or selling saris in Surat.
The solution, however, is not to mirror America’s tariff war with one of our own. Rather than retaliating with blanket duties on US imports, India should seize the moment to make its economy more open, competitive, and consumer-friendly. That means lowering our import tariffs, especially on consumer goods where global competition drives better quality and prices. It means signing trade deals that aren’t just about political alliances but about securing cheaper medicines, cutting-edge tech, and better value for Indian consumers. It means slashing red tape at customs so Indian exporters can survive, not just U.S. tariffs, but future global disruptions. Most importantly, it means putting consumer welfare at the heart of our trade policy – not treating it as a side effect.
If the cost of a trade war is higher prices, fewer choices, and shrinking markets, the goal of trade reform must be the opposite: greater access, lower prices, and more freedom to choose. India has long spoken about becoming a global manufacturing hub. However, that ambition will remain half-baked unless we build an economy where producers and consumers benefit from openness, not protectionism. Trump’s tariff bombshell is a challenge, but also an opportunity. Instead of playing defense, it is time India went on offense, with policies that protect not just producers, but also the millions of consumers who stand to gain from a freer, fairer global marketplace.
Originally published here