Prime Minister Narendra Modi has said he is willing to pay a personal price to protect India’s farmers.
In what’s being seen as a snub to US President Donald Trump, PM Modi made it clear that India will never compromise on the interests of its farmers, fishermen and dairy sector.
Why are trade talks stuck?
According to reports, the United States has been insisting on India opening these sectors to US goods. However, India has dug its heels in deeper, refusing to budge. While the decision is good for Indian farmers, no trade deal with the US may lead to some pain for India’s exports.
50% tariff on India
PM Modi’s statement also assumes significance because of its timing. It came a day after the United States imposed an additional 25% tariff on India, pushing the overall tariff figure to 50% effective from August 25.
The move will hurt Indian businesses exporting to the US. According to various estimates, it could lead to a 25 billion dollar hit for India.
This could potentially translate to job losses, a hiring freeze and the death of the American dream for some.
Trump’s tariff: India’s response
The Indian government responded to the additional tariff move, calling it “unfair, unjustified and unreasonable.”
A statement by the Ministry of External Affairs reiterated India’s position on Russian oil, saying that India’s imports were based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people in India.
The MEA added that India will take all actions necessary to protect its national interests.
Apple in Trump’s tariff crosshairs
Apple, one of the world’s most valuable companies, is also wedged between politics and profit. The company has long been goaded by Donald Trump to move iPhone production out of China and India, and into the United States.
Now, Apple has announced a fresh commitment to invest $100 billion in the US to deepen its manufacturing base. That takes Apple’s total US manufacturing commitment to $600 billion.
This could have some impact on the Indian economy if Apple cuts down on its plan to expand manufacturing in India. However, in the short term, this is unlikely to affect the Indian consumer.
RBI’s rate decision
The RBI kept its key lending rate unchanged at 5.5%. This means that your home loan or other EMIs will most likely not increase.
In other key announcements, the RBI said it is working on standardising the claim settlement process for the kin of deceased bank customers.
It also announced plans to expand the RBI Retail Direct platform to allow retail investors to invest in treasury bills via SIPs.
E20 fuel debate
The E20 fuel debate took over social media this week. E20 is a blend of 20% ethanol and 80% petrol. Many users posted complaints about lower mileage and engine damage.
The government responded with data, saying the mileage drop is marginal and there is no proven engine damage.
At an event hosted by The Hindu, Union Minister Nitin Gadkari weighed in, calling the backlash a “political conspiracy.” He also suggested that petrol lobbies could be behind the negative chatter online.
Dalal Street in the red
It was a volatile week for the Indian stock markets amid the tariff tussle and US imposing an additional 25% tariff on India. The Nifty and Sensex ended the week about 1% lower driven by tariff concerns and cautious investor sentiment.
