India must have a policy to counteract US President Donald Trump's threat of tarrif war, former Union Finance Minister and senior Congress leader P Chidambaram has said.
If the Indian government's perception is that US is taking one step forward and two steps backward, it must have a policy to counteract that, Chidambaram said.
"In fact, my information is, most ministers are in the dark. Who is involved in making this reactive policy to America's uncertain policy? I don't know. Nobody seems to know," he said.
"If you don't wish to have a public discussion in parliament, then you should at least invite the principal opposition parties which are represented in parliament and take leaders into confidence of what alternative scenarios are being worked out," he added.
Further, in an interview to NDTV, Chidambaram called for finding common ground with other nations that share the same interests in pushing back against Trump. If Trump starts picking out individual countries to apply different tarrifs, the affected nations could be left to fend on their own.
Trump's decision to slap a 25 per cent tariff on all auto imports has cast uncertainty over India's nearly $7 billion of exports to the US, which industry fears could squeeze margins. Automobiles and car parts imported to the US would face a 25 per cent tariff starting April 2.
While India is not a big exporter of cars to the US, Tata Motors' luxury car subsidiary Jaguar Land Rover (JLR) is deeply entrenched in the American market. Indian auto ancillary firms will see the biggest hit as they export a lot of components to the US.
About a fifth of the revenue of India's auto component sector is derived from exports. Of this, 27 per cent is to the US market alone.
Speaking in the Rajya Sabha on Thursday, Chidambaram reportedly termed tariffs as the "elephant in the room" and claimed that Trump had informed Prime Minister Narendra Modi of his intention to impose reciprocal tariffs.
Chidambaram questioned whether the recent cuts in customs duties announced by the Modi government in the 2025-26 Union Budget were a genuine policy shift or a response to Trump’s looming threats. He argued that the tariff cuts on items such as motor vehicles and toys were more a result of "the Trump Effect" than any real change in government policy.
In his speech, according to a report, Chidambaram also highlighted the dire economic challenges facing India, including rising unemployment, inflation in essential sectors such as food, education, and healthcare, stagnant wages, and increasing household debt. He accused the government of ruthlessly cutting budgeted expenditures in crucial areas such as health, education, social welfare, agriculture, and rural development, exacerbating the country’s economic troubles.
