US tariffs not the end of the world: Sushant Sareen says India must now free its economy from bureaucracy

"US tariffs are not the end of the world. They will hurt, of course. But it is an opportunity to fix some things that we were kicking down the road," wrote Sushant Sareen, senior fellow at the Observer Research Foundation, after President Donald Trump announced sweeping trade penalties on Indian goods.

The White House move, effective August 1, includes a 25% tariff and an unspecified penalty targeting India’s continued defence and energy ties with Russia. "India will therefore be paying a tariff of 25%, plus a penalty for the above, starting on August first," Trump posted Wednesday. He also took aim at India’s longstanding trade policies, calling them 'among the highest in the world" and describing New Delhi’s trade regulations as "strenuous and obnoxious non-monetary trade barriers."

For Sareen, the answer lies in making long-delayed changes. "Free the economy from the clutches of the bureaucracy, initiate reforms on a war footings, become the demolisher of obstacles that the PM was famous for, make regulation sensible, transparent and enforce it without exception. Bring in the necessary reforms in the digital space. Force foreign companies to follow Indian laws and have their data centres in India," he wrote.

The tariffs come amid stalled U.S.-India trade negotiations. New Delhi has resisted pressure from Washington on duty cuts for sensitive sectors like agriculture and dairy-especially genetically modified crops, dairy standards, and processed food-citing health and food security. As part of its negotiating stance, India has not offered any dairy duty concessions in its free trade agreements so far.

India is seeking the rollback of additional duties on its steel and aluminium exports (which currently attract nearly 50% U.S. tariffs), and also wants the 25% duty on automobiles to be relaxed. In return, India is willing to consider concessions for some industrial goods, but remains firm on preserving domestic standards for GMOs and digital data localisation.

Sareen warned against capitulating under U.S. pressure. "India has hoped it could do a fair deal with US. But succumbing to bullying is not part of the deal. At the end of the day, a trade deal has to be fair, and it must ensure that lives of Indians become better, not worse. Trump too shall pass," he said. "Trump is a bully. The more we try to please and humour him, the more he will push us. Time to push back."

Navroop Singh, an intellectual property attorney, applauded the Modi government for holding its ground. "So Proud of My Government for not bending to this Bully. All those naysayers who doubted Modi's intentions are proven wrong. I think this is a bigger reward than any state honour he has received so far. The Buffoon in White House is truly pissed with him & not even issued a letter. Well Done PM Narendra Modi for not giving up on nontrade barriers critical to our food & health security like Agriculture GMO, Dairy, Pharma & Data Sovereignity (Localisation)!" he wrote.

Meanwhile, India has reserved its right under World Trade Organization (WTO) rules to impose retaliatory duties, and is pushing for tariff concessions from the U.S. in labour-intensive sectors such as textiles, garments, leather, chemicals, plastics, gems and jewellery, shrimp, bananas, oilseeds, and grapes. The outcome of ongoing negotiations could determine how far both sides are willing to go in this latest round of trade friction.