Trump tariff impact: 'IT industry, white collar economy would collapse' — Investor warns of hard times ahead for India

Investor D Muthukrishnan on Thursday took to social media to decode the impact of US President Donald Trump's aggressive position vis-à-vis India on the latter's economy. In a post on X (formerly Twitter), Muthukrishnan said that everyone is focused on Trump's announcement of 25 per cent tariffs on Indian imports.

He mentioned that we don't have an inkling of what could be levied on India in the name of a penalty for importing Russian oil. 

"India would not yield, and Trump would get more aggressive. Everyone is talking about 25% tariff on products. We don't know what is going to be added as penalty for importing oil from Russia," D Muthukrishnan wrote on X.

Furthermore, the investor warned of hard times ahead for India's IT industry and its white collar economy. "And the elephant in the room is our huge services, IT exports to US. If Trump decides to levy huge tariff on our services export, IT industry and white collar economy would collapse." 

The stock market investor also said Trump has already made it difficult for Indian students and tech professionals in the US. "Trump already not giving visas to meritorious Indian students, asking tech companies to stop expanding in India and recruiting employees from our country," the investor explained. 

Towards the end of his post, Muthukrishnan said that India should be ready for hard times unless the government makes a diplomatic breakthrough with the US. 

"He asked all tech heads to bring back businesses to America and for Americans. This is really a tough situation for India. Unless we make a diplomatic breakthrough, be ready for hard times," he signed off. 

Donald Trump's tariff on India, New Delhi responds

On Wednesday, Trump announced a 25 per cent tariff on Indian imports as well as an unspecified penalty for Russian defence and oil imports. In a social media post confirming the tariff, Trump called India's trade policies "most strenuous and obnoxious". 

"All things not good! India will therefore be paying a tariff of 25 per cent, plus a penalty for the above, starting on August first," Trump said.

New Delhi has "taken note" of Trump's statement on bilateral trade and the government is studying its implications. 

“India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective,” the statement said.