US President Donald Trump has called the Indian economy a dead one. The statement came just hours after he announced a 25% tariff on Indian goods, starting from the first of August.
While making the tariff announcement, Trump reiterated that India’s tariffs were far too high and its non-monetary trade barriers were “most strenuous and obnoxious.”
The US President also said the US would penalise India for buying a vast majority of military equipment from Russia and for being one of the largest buyers of Russian energy products.
India’s response to 25% tariff
While the US President was as dramatic as ever in making this unexpected announcement, India’s response was measured. The Indian government said that it had taken note of Trump’s announcement.
It added that the two sides were engaged in talks for a bilateral trade deal and that India remains committed to that objective.
Stock markets nonchalant
Not only the Indian government, but even the Indian stock market responded to Trump’s tariff announcement nonchalantly.
On the 31st of July, the day after Trump’s tariff move, Indian equities ended the day without any sharp cuts. For the week as well, Dalal Street ended just marginally in the red.
Dead economy jibe: The response
Meanwhile, in what appeared to be a response to Trump’s “dead economy” jibe, Commerce Minister Piyush Goyal highlighted how India was poised to become the third-largest economy in the world soon.
He also underlined India’s bounce-back, from being a part of the fragile five around a decade ago to being the world’s fifth-largest economy now.
EU, South Korea sign US trade deals
While India saw the tariff turbulence, many others managed to sign trade deals with the United States this week. The most notable of those was the one the European Union struck.
Under the agreement, the US will impose 15% tariffs on most European goods. That comes as a big relief for the bloc, as Trump had threatened a 30% tariff if no deal was reached by August 1.
South Korea also signed a similar deal with the US. South Korean goods will now be subject to a 15 per cent tariff, while US exports will not face duties.
The Pakistan surprise
There was also a surprise entry on Trump’s deal list. The US President announced that he had struck a deal with Pakistan to develop its oil reserves. And in what seemed like a taunt, Trump also said maybe Pakistan would be selling oil to India some day.
India’s smartphone dominance
Amid all the Trump tariff twists came another surprising piece of news. India dethroned China as the top smartphone supplier to the United States. For the first time ever, India now wears the crown.
Between April and June this year, India accounted for 44% of all smartphone shipments to the US, according to research firm Canalys. That’s nearly 12 million devices, up 240% from the same quarter last year.
Just 12 months ago, China was in the lead with over 60% share. The surge has been driven by Apple, which has been selling Made in India iPhones in the US due to higher tariffs on China.
Tata Motors’ big CV bet
Tata Motors announced the biggest acquisition in its history. The Indian auto giant, which already has the iconic British passenger vehicle brands Jaguar and Land Rover in its portfolio, has now set its sights on a commercial vehicles maker.
The Tatas are buying the CV arm of Italy’s Iveco Group in a deal valued at 4.4 billion dollars. This is Tata Motors’ largest-ever M&A deal, surpassing the 2008 Jaguar Land Rover deal of $2.3 billion.
Once combined, Tata–Iveco is expected to emerge as a global commercial vehicle powerhouse, targeting annual revenue of roughly 25 billion dollars.
