Former finance minister and senior Congress leader P Chidambaram on Thursday said India must stand with saner voices in the world and collectively do everything to prevent a tariff and trade war, even as he sought to know from the Union government the country’s response to US President Donald Trump’s threat of tariff war.
Initiating a discussion on the Finance Bill in the Rajya Sabha, Chidambaram read out the recent cuts in customs duty announced by the Narendra Modi government on items ranging from motor vehicles to toys in the Union Budget 2025-26, saying: “Is this a genuine change of heart? I don’t think so. I think this is the effect of Mr Donald Trump. The Trump Effect has forced the government to reduce these duties.”
Terming tariffs the elephant in the room, the former finance minister claimed that Trump has told PM Modi that he will launch a tariff war (reciprocal tariff) from April 2.
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“If the PM’s praise (for Trump) has failed and tariffs are imposed, I want to know what is the government response. It will wreck the world economy and ruin the economy of developing nations. If a tariff war and trade war is unleashed, it will lead to a dip in exports, lower FDI, higher inflation and currency depreciation,” he said, alleging that no discussion in Parliament or consultation with Opposition parties has been held over the matter.
{{/usCountry}}“If the PM’s praise (for Trump) has failed and tariffs are imposed, I want to know what is the government response. It will wreck the world economy and ruin the economy of developing nations. If a tariff war and trade war is unleashed, it will lead to a dip in exports, lower FDI, higher inflation and currency depreciation,” he said, alleging that no discussion in Parliament or consultation with Opposition parties has been held over the matter.
{{/usCountry}}India must stand with saner voices in the world such as Canada, Britain, France, Germany and Japan and collectively do everything to prevent a tariff and trade war, he said.
Pointing out that the country faces rising unemployment, inflation in food, education and health care, stagnant wages, falling consumption, depreciating currency and rising house hold debt, Chidambaram targeted the government, saying it has “mercilessly cut budgeted expenditure” on health, education and social welfare, agriculture, rural, development and other areas.
Earlier, finance minister Nirmala Sitharaman moved the Finance Bill, 2025 in Rajya Sabha for consideration. It was passed by Lok Sabha on Tuesday.