The New Trade Union Initiative (NTUI) strongly condemns the decision of the United States government to impose punitive tariffs on Indian exports. These measures are a clear escalation in the ongoing economic pressures directed at countries in the Global South. Presented as part of a “rules-based international order,” they are in fact measures of economic control designed to serve the strategic and corporate interests of U.S. and Western capital.

These tariffs are not limited adjustments in trade policy. They are targeted actions against India’s labour-intensive export sectors—garments, footwear, jewellery, and light engineering—where large sections of the working class, including women, migrants, and historically marginalised communities, are employed. Outside of pharmaceuticals, nearly all major labour-intensive industries are now under pressure. Immediate consequences include rising job losses, particularly among low-wage and informal workers.

While pro-government business lobbies seek to downplay the effects, independent estimates suggest a GDP reduction of up to 0.8%. Micro, small, and medium enterprises (MSMEs)—still recovering from demonetisation, the Goods and Services Tax, and the Covid-19 crisis—now face additional strain. This is not the result of unforeseen global events, but a consequence of the government’s inconsistent trade policy and its preference for corporate interests over public welfare.

Sanctions on India, Gains for Private Capital

Of particular concern is the imposition of “secondary” sanctions against India for continuing imports of Russian crude oil. These have been introduced even as NATO-aligned countries continue to import Russian energy, highlighting the double standards of the global trade system.

Access to affordable energy is critical, especially in a country where over 70% of the workforce earns less than the statutory minimum wage. These sanctions have serious implications for livelihoods and the cost of living.

However, instead of using these imports to strengthen domestic energy stability, the BJP government has enabled two of India’s largest private refiners—including the country’s biggest corporate conglomerate—to re-export refined Russian oil for profit. What has been presented as a measure for national energy security has primarily benefited private capital.

Lack of Strategy, Loss of Sovereignty

The government’s handling of India–U.S. trade relations has lacked a clear strategy. It was based on the assumption that personal ties between Prime Minister Modi and U.S. President Donald Trump could replace institutional engagement. That assumption has failed. The U.S. has acted in its own interest as defined by its present government, while India’s response has been marked by delay and limited clarity.

There is credible evidence that Indian negotiators made early concessions to the U.S. on key issues—market access, digital trade, and intellectual property—without parliamentary mandate or public consultation. These were later withdrawn not on grounds of principle but due to inadequate preparation, which exposed India’s weak negotiating position.

The recently signed India–United Kingdom Comprehensive Economic and Trade Agreement raises further concerns. Despite being described as a success, the agreement: (1) Reduces tariffs in core manufacturing sectors like automobiles and engineering, affecting MSMEs; (2) Weakens protections related to compulsory licensing, potentially limiting access to essential medicines; and (3) Opens up government procurement to foreign firms, challenging the autonomy of public policy.

What is presented as trade diplomacy has, in practice, involved significant concessions to foreign capital.

The “Make in India” Gap

The government’s “Make in India” campaign and the idea of positioning India as a “China +1” manufacturing hub have not translated into significant industrial outcomes. The Production Linked Incentive (PLI) scheme has mostly supported assembly work that continues to rely on imports. For example, over 80% of the components used in iPhones assembled in India continue to be sourced from China.

This model does not promote long-term industrial development or stable employment. It passes production risk onto workers while protecting the profits of multinational corporations and large domestic companies. A sustainable and sovereign economic model cannot be built on external dependency and weak local capacity.

What is required is a broad-based, democratic industrial policy that raises incomes, supports domestic demand, expands social protections, and makes full employment a central goal.

Agriculture, Federalism, and Accountability

Prime Minister Modi’s recent statement that agriculture is a “top priority” stands in contrast to the government’s record. Policies introduced over the last decade have weakened procurement, reduced support for public distribution, and increased corporate influence in agriculture.

In the current export crisis triggered by new tariffs, the same Union government that excluded state governments from trade decisions is now asking them to respond to the fallout. This cannot be described as cooperative federalism. It reflects a pattern of centralised decision-making without consultation, followed by shifting responsibility to the states.

BRICS and the Role of the Global South

We take note of Prime Minister Modi’s recent discussions with Brazilian President Lula and his planned visit to China. These engagements offer an opportunity to strengthen BRICS and support genuine cooperation within the Global South.

However, such cooperation must move beyond elite-level diplomacy. It must be based on shared interests, democratic sovereignty, and a global trade framework that serves the needs of the majority, not just large corporations and powerful states.

1. Immediate suspension of all ongoing trade negotiations with the United States, with retaliatory tariffs introduced where necessary;

2. An end to non-transparent trade negotiations, with a clear commitment to:

    Public consultations with workers, farmers, and civil society;

    Formal engagement with state governments;

    Parliamentary ratification of trade agreements, following necessary legal and procedural changes;

3. Strengthening of key sectors, particularly agriculture, healthcare, and domestic industry;

4. Rejection of restrictive intellectual property frameworks that limit access to essential medicines, seeds, and technology;

5. Development of a new industrial policy, grounded in democratic control, labour rights, environmental sustainability, and economic sovereignty.

Beyond Resistance: Rebuilding on a Democratic Foundation

This moment reflects not just a policy failure, but a deeper crisis of governance and public accountability. The government has repeatedly prioritised external validation and corporate profits over development outcomes for people.

India’s future cannot be based on dependency or inequality. What is needed is a process of reconstruction—led by workers, farmers, and democratic movements committed to a just economic order.

Call to Action: 13 August Countrywide Protest

The NTUI fully supports the nationwide protest on 13 August 2025, called jointly by the Central Trade Union Organisations (CTUOs) and the Samyukta Kisan Morcha (SKM).

We urge all democratic forces—workers, farmers, students, and people’s organisations—to participate and build a broad-based resistance to policies that undermine sovereignty, livelihoods, and democratic accountability.

Gautam Mody
General Secretary

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