Cotton Rates Fall on India’s US Tariff Response; Ambani Gains from Oil Deals

On 15 Aug, in his Independence Day speech, Indian Prime Minister Narender Modi said, 'Modi is standing like a wall against any harmful policy related to the farmers, fishermen and cattle rearers of India.’ On 19 Aug, bowing to the 50% tariff by the US, the Indian Union Textile Ministry decided to exempt all customs duties on the import of raw cotton until 30 Sep. The waivers amount to 11% import duty reduction on cotton. Cotton rates have fallen. The US plans to export nearly 2.72 MT cotton to India. The farmers’ union alliance Samyukt Kisan Morcha (SKM) said the move signalled a death warrant to cotton farmers, including those from Panjab. SKM added, the cotton area is most suicide prone region of India because of fluctuation of prices. In the dairy sector, Daljit Singh Gill of the Punjab Dairy Farmers’ Association says with new US tariffs the India’s dairy sector could be wiped out. 'The industry is becoming cost-intensive due to cold chain demands and mechanization. If cheaper American milk powder or other dairy products are allowed into India, nothing will survive—not just in Panjab, but across the nation.' The US President Donald Trump says the extra tariff on India is for buying Russian oil during the ongoing Russia-Ukraine war. The fact is, Indian business tycoon Mukesh Ambani profited from 67% of the oil and gas deals. Neither did the Indian consumer get concession in rates nor did the govt earn money. Still the Indian govt is defending the oil trade. Indian External Affairs minister Subrahmanyam Jaishankar said, 'If you have a problem buying oil or refined products from India, don't buy it. Nobody forces you to buy it. Europe buys, America buys, so you don't like it, don't buy it.' Amid India actively facilitating cotton import, this shows India does not have a coherent response to the tariff war and the govt is domestically trying to please its constituency but keeps bowing down to external pressure (earlier coverage).