Basic HTML Version

|  | Table of Contents |  | View Full Version

Page 5 - The Indian EYE 012326
P. 5

    COVER STORY                                                          JANUARY 23, 2026      |  The Indian Eye                    5

                    The tariff shock                                                                              these  moves suggest  a  hardening
                                                                                                                  US posture that prioritizes coercion
                  resident Trump’s announce-                                                                      over accommodation — even with
                  ment that any country doing                                                                     strategic partners.
            Pbusiness with Iran would face a                                                                          Tharoor warned that at punitive
            blanket 25 per cent tariff on “any and                                                                tariff levels, “the strategic partner-
            all business” with the US has added                                                                   ship ceases to have any meaning.”
            a sharp economic edge to the crisis.                                                                  His remarks underline a growing
            The Indian government has suggest-                                                                    concern in New Delhi that India is
            ed the impact may be “minimal,”                                                                       being asked to absorb economic pain
            noting that India–Iran trade stands at                                                                without  sufficient  regard  for  its  in-
            about USD 1.6–1.68 billion, just 0.15                                                                 terests or constraints.
            per cent of India’s total trade.                                                                           Balancing the strategy
                But critics argue this is a narrow
            and misleading assessment.                                                                               ndia’s challenge is to navigate this
                                                                                                                     crisis without alienating either
            Congress MP and Standing                                                                              Iside. Openly opposing Washing-
                                                                                                                  ton risks worsening trade and diplo-
            Committee on Foreign Affairs                                                                          matic ties; abandoning Iran under-

            Chairman     Shashi     Tharoor                                                                       mines India’s regional strategy and
                                                                                                                  long-term connectivity goals.
            warned  that the Iranian tariff    A group of Iranian People stage a protest outside of Iran embassy against the current regime   The stakes are further raised by
            cannot be viewed in isolation.                     in New Delhi on Wednesday (ANI Photo/Sumit)        Iran’s formal entry into the BRICS
                                                                                                                  grouping, even as India assumes the
            “The 25 per cent was already a                                                                        bloc’s presidency in 2026. Any esca-

            problem. Now, you have 25 per     According to CBS News, Gulf states   Gulf. Such shocks would directly hit   lation involving Tehran would com-
                                              have warned Washington that strikes
                                                                                                                  plicate New Delhi’s BRICS agen-
                                                                                India’s  economy,  inflation  outlook
            cent more for Russian sanc-       on Iran could destabilize the region   and balance of payments.     da, testing India’s ability to balance
            tions which takes it up to 50     economically  and  militarily,  while   The Iran crisis is unfolding at a   strategic autonomy with deepening
                                              also cautioning Tehran against retal-  time when Indo-US relations are al-  engagement with the United States.
            per cent and if there are 25 per  iatory attacks on US facilities.  ready described by opposition lead-   So far, New Delhi has opted for
            cent more in Iranian sanctions,       These fears are not abstract. The   ers as “very turbulent.” Congress   cautious engagement: urging its citi-
                                              Pentagon has already redeployed   MP Jairam Ramesh has pointed to   zens to leave Iran, engaging the US on
            that it takes it up to 75 per  a US carrier strike group to the     a “new abnormal” in ties, citing not   sanctions waivers, and publicly avoid-
            cent,” he said.                   CENTCOM area, while personnel     only tariffs linked to Iran and Russia   ing commentary on potential military
                                              at Al Udeid Air Base in Qatar have   but also proposed US legislation tar-  action. This calibrated approach re-
                                              been advised to leave as a precau-  geting India’s trade practices.  flects  India’s  desire  to  keep  diplo-
                “At 75 per cent, no Indian com-
                                                                                    Ramesh noted that US Senator
            pany will be viable in exporting to   tion. Iran, for its part, has reportedly   Lindsey Graham is pushing a bill   matic space open as events unfold.
                                                                                                                      Yet, the room for maneuver is
                                              warned that certain countries could
            America,” Tharoor added, pointing   face missile strikes if the US attacks.  that could impose “vast new sanc-  shrinking. A US–Iran war would
            out that India’s labor-intensive ex-  For India, any escalation could   tions” on India for its ties with Rus-  force harder choices, particularly if
            ports — gems and jeweler, marine   disrupt oil supplies, spike global en-  sia, while another proposal seeks a   sanctions tighten further or if India’s
            products, leather and shrimp — al-  ergy prices, threaten shipping lanes   25 per cent tax on American compa-  assets and personnel in Iran and the
            ready face tougher tariffs than com-  through the Strait of Hormuz, and   nies making outsourcing payments.   Gulf are directly threatened.
            petitors like Vietnam, Thailand, In-  endanger Indian workers across the   Together  with  Iran-linked  tariffs,   The unfolding confrontation
            donesia, Pakistan and Bangladesh.                                                                     between the US and Iran illustrates
                In effect, the Iran-linked tariff
            risks compounding existing trade                                                                      how great-power rivalry and unilat-
                                                                                                                  eral economic measures can entan-
            disadvantages, making Indian ex-                                                                      gle  countries  like  India  in  difficult
            ports uncompetitive in the US mar-                                                                    trade-offs. While India’s direct trade
            ket and hollowing out sectors that                                                                    with Iran may be modest, its indirect
            employ millions.
                                                                                                                  exposure — through energy, region-
                    War in the Gulf                                                                               al stability, connectivity projects and
                                                                                                                  cumulative tariffs — is substantial.
                  eyond tariffs, a US war on                                                                          As Gulf diplomats have warned,
                  Iran would have far-reach-                                                                      once  tensions  spiral  into  open  con-
            Bing  consequences  for the                                                                           flict,  “there  could  be  lots  of  con-
            entire region — and India is deep-                                                                    sequences.” For India, those con-
            ly exposed to that fallout. The Gulf                                                                  sequences would likely include
            remains India’s primary source of                                                                     economic shocks, strategic setbacks
            energy, a major destination for its                                                                   and a further erosion of trust in an
            exports, and home to over eight mil-                                                                  already strained partnership with
            lion Indian expatriates.                                                                              Washington.
                US allies in the Middle East                                                                          Whether  diplomacy  prevails  or
            —  including  Saudi  Arabia,  Qatar,                                                                  confrontation escalates, the Iran cri-
            Egypt and Oman — are reportedly      Local people gather to express solidarity with Iran’s Supreme Leader, Ayatollah Syed Ali   sis is fast becoming a defining test of
            engaged in an intense diplomatic         Khamenei, amidst Iran’s rising tensions, in Srinagar on Friday (ANI Photo)  India’s foreign policy balancing act in
            push to avert military confrontation.                                                                 an increasingly unpredictable world.

                                                                   www.TheIndianEYE.com

| 1 2 3 4 5 6 7 8 9 10 |