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Opinion | GST 2.0 Plus Alternatives To US: Modi’s Reply To Trump

19 1
06.09.2025

When Washington moved to raise duties on a wide set of Indian exports to 50 per cent, the aim was straightforward — to force concessions or extract commercial leverage from New Delhi. Reports from the past week captured the public face of the dispute — US President Donald Trump’s repeated criticisms of India’s trade stance and claims about barter with Russia — and the private diplomatic disquiet that followed. The tariffs have been framed in US political debate as part of a broader protectionist push; internationally they prompted quick reassessments of alliances and trade strategies.

Politically, the measures created an opening for India to choose posture. The Narendra Modi government picked restraint over recrimination: There was no headline-grabbing retaliation aimed at Washington; instead New Delhi recalibrated policy instruments at home and redoubled outreach abroad. That diplomatic choice has two effects — it denies the US the spectacle of an escalatory bilateral row, and it buys India time to convert diplomatic sympathy into new commercial and strategic partnerships.

This, in fact, has been the BJP-led NDA’s template response in the face of adversity. Remember then-Finance Minister Yashwant Sinha’s ‘bland’ budget in the year 2000, the time when many Indians expected retaliation against the sanctions for Pokhran II slapped by the Bill Clinton-ruled US? India’s domestic politics may see knee-jerk reactions quite often; India’s management of extern affairs rarely does.

Prime Minister Narendra Modi returned to New Delhi on 2 September after a four-day diplomatic tour to Japan and China, timed amid the escalating US tariff row. In Japan from 29-30 August, Modi co-chaired the 15th India-Japan Annual Summit with Prime Minister Shigeru Ishiba, focusing on defence cooperation, economic ties, and supply chain resilience—areas critical for diversifying away from US dependencies. Discussions reportedly included accelerating joint ventures in semiconductors and green energy, with both leaders emphasising a “free and open Indo-Pacific" in subtle counterpoint to US protectionism.

From there, Modi proceeded to China for the Shanghai Cooperation Organisation (SCO) summit in Tianjin from 31 August to 1 September—his first visit to the country in seven years. Bilateral talks with President Xi Jinping highlighted efforts to stabilise relations post-border tensions, with agreements on trade deficit reduction and resuming direct flights. Foreign Secretary Vikram Misri noted that both leaders viewed their nations as “partners rather than rivals", stressing that stable ties could benefit 2.8 billion people and foster a multipolar Asia. While no major breakthroughs on territorial disputes emerged, the meeting underscored India’s push for balanced trade amid US pressures, with Modi advocating a “political........

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