Finance Minister Nirmala Sitharaman issued a stark warning on Wednesday, stating that global trade is increasingly "getting weaponised" through the imposition of tariffs and other protective measures. She emphasized that India will need to navigate this shifting landscape with extreme caution during its international negotiations.
The New Reality of Weaponized Trade
Sitharaman's remarks come against a backdrop of rising protectionism. She pointed to recent actions, such as former US President Donald Trump's 25% duty on Indian goods, citing trade deficits, and a subsequent 25% penalty linked to India's purchase of Russian crude oil. More recently, Mexico approved steep tariff hikes of up to 50% from 2026 on imports from nations without free trade agreements, a list that includes India.
"Trade is getting weaponised through tariff, through many other measures and India will have to negotiate its way carefully in this, and not just take care of tariff but I think overall our economy strength is what is going to give us that additional advantage," Sitharaman stated at a public event.
India's Defensive Stance and Global Double Standards
The Finance Minister pushed back against criticism labeling India as "inward-looking" or a "tariff king." She argued that India's use of tariffs has been purely defensive, aimed at protecting domestic industries from unfair competition and predatory practices. According to Sitharaman, the global scenario has made it "very clear" that trade is no longer free and fair.
She highlighted a perceived double standard in international trade discourse. While tariffs are often criticized, she noted that some countries are now openly embracing them without facing the same level of scrutiny. "Suddenly we have newer people coming up saying we'll come up with tariff barriers and there's no questioning. So that seems to be the new normal," she added.
Navigating the Path Forward
In response to these challenges, India is not remaining passive. The government has already begun discussions with Mexico to mitigate the potential impact of its announced tariff increases. Sitharaman's core message underscores that in this era of weaponized trade, India's strategy must extend beyond just managing tariff barriers. The nation's broader economic resilience and strength will be its ultimate shield and advantage in complex negotiations.
The minister's comments signal a pragmatic approach from New Delhi, recognizing the changed rules of global commerce while asserting its right to safeguard its economic interests in a landscape where traditional free trade principles are being rapidly redefined.
