Donald Trump just called India a dead economy and slapped a 25% tariff on us. He then went ahead and closed an oil deal with Pakistan and said that he doesn't care about India at all.
His exact words were,
"I don't care what India does with Russia, they can take their dead economies down together for all I care."
But what does it mean for you and me?
Well, it means that the 25% tariff applies only to Indian goods exported to the US, not the ones assembled and sold here in India. So people in India won't see any direct price hikes on things like smartphones and laptops. And in most cases our day to day life will go on as usual.
However, for India as a whole, the story is different. Because US and other global companies use India mainly for lower assembly costs, like cheap labor, and when the US slaps a 25% tariff on Indian exports up from near-zero tariffs before, the cost of Indian-made products shipping to the US jumps by about 25%.
Now that forces US companies to either, first, raise retail prices in the US and risk lower sales; second, absorb the cost themselves and hurt profit margins; or third, simply shift to another low-cost country not facing insane tariffs like India.
And that's the problem. If the 25% tariff stays, companies might end up choosing the third option. That means less export business for India, fewer factories, and less local job growth. And the timing of it all makes it even more concerning, as the world is already facing a Job Security threat from the likes of AI. So yeah this might become an issue for the short term.
