NEW DELHI– India may be angered by U.S. President Donald Trump’s decision to sharply increase tariffs on Indian goods, but analysts argue the real test lies in how New Delhi uses the moment to push forward long-term reforms.
A commentary published in India Narrative on Wednesday said the path forward “lies not in lamenting betrayal but in hardening independence,” urging India to accelerate domestic capacity-building, diversify supply chains, and unleash innovation. According to the piece, these steps could transform strategic autonomy “from a vulnerable aspiration into an unshakable reality.”
A separate assessment by Crisil Intelligence warned that the new tariffs would disproportionately impact Micro, Small, and Medium Enterprises (MSMEs), which account for roughly 45 percent of India’s total exports. The U.S. currently imposes a 25 percent tariff on Indian goods, but with an additional 25 percent set to take effect on August 27, total duties will rise to 50 percent.
To soften the blow, Crisil suggested India could redirect exports to other markets, including leveraging the recently concluded trade deal with the United Kingdom and a potential agreement with the European Union.
The India Narrative report stressed that India should not count on special dispensations from Washington or appeals to fairness. “It must prepare for an environment where every nation, ally or adversary, will leverage trade and technology as instruments of pressure,” the piece said.
The commentary pointed to India’s success with digital payments as a model of resilience. The Unified Payments Interface (UPI), now integrated with RuPay, has grown rapidly — accounting for nearly 30 percent of credit card transactions this year, up from just 10 percent in 2024. By building indigenous platforms, the report argued, India has been able to control its payments infrastructure, safeguard critical data, and expand financial inclusion while resisting external pressures.
Observers said India now has an opportunity to replicate that model in other key sectors, from semiconductors and sovereign AI platforms to defense technologies and energy independence. Prime Minister Narendra Modi has already signaled a push in this direction, holding a high-level meeting on “next-generation reforms” and promising simplification of the Goods and Services Tax.
“But incremental reform will not suffice,” the India Narrative article emphasized. “To withstand the coercive tactics of great powers, India needs a generational leap in capacity.” (Source: IANS)
