Editorial 1: Shaping a response to the U.S.’s reciprocal tariffs

Context

New Delhi should take a multi-sided approach, remembering that buying more goods from the U.S. will help lower the tariff rate the U.S. puts on India.

Introduction

President Donald Trump’s plan for reciprocal tariffs was shocking, but not completely unexpected. The new tariffshave two parts: one is the current tax on specific products, and the other is an extra tax on goods from certain countries. So, the final tariffs depend on both the product and the country. These reciprocal tariffs are now paused, and limited to 10% for 90 days, except for China.

Calculation of reciprocal tariffs

• The U.S. reciprocal country-wise tariff is calculated using a specific formula.
• The formula is:
  U.S. discounted tariff rate = (-1) × (½) × (U.S. exports – U.S. imports) / U.S. imports
• This formula does not use details like individual tariffs or import demand elasticity.
• The formula is not a proper method to determine actual tariff rates.
• The table shared by President Trump has a misleading column called “charged to the US”.
  • This column is not the actual tariff imposed by other countries.
  • It is just twice the discounted reciprocal tariff rate.
• Example: For India (2024 data):
  • Exports from U.S. to India: $41.8 billion
  • Imports to U.S. from India: $87.4 billion
  • So, India’s discounted reciprocal tariff rate = 26%
• This 26% penalty tariff will be added to the current commodity-wise tariffs for India.
• Countries not on the reciprocal list will face a minimum (floor) rate of 10%, added to their normal tariffs.
• Some commodities are exempted from this extra tariff:
  • Steel/Aluminium items
  • Autos/Auto parts
  • Copper
  • Pharmaceuticals
  • Semiconductors
  • Lumber
  • Bullion and energy
  • Certain rare minerals not found in the U.S.

Country	U.S. Exports($B)	U.S. Imports($B)	Discounted Reciprocal Tariff Formula	Resulting Tariff Rate
India	41.8	87.4	(-1) × ½ × (41.8 – 87.4) / 87.4	26%
Others (not on list)	—	—	—	10% (floor rate)

• The reciprocal tariff is an extra charge and is common across all goods from that country unless exempted.

India’s Export Situation & Immediate Impact

• India’s exports to the U.S. are:
  • Moderate as a share of India’s GDP
  • Low in total volume, and have been falling in recent years
• India is not heavily dependent on exports.
• The impact of the 26% additional tariff by the U.S. will be small overall, but will vary across products.

Main Indian Exports Affected by the 26% U.S. Tariff

Product Category	Impact of Tariff	Remarks
Electrical machinery	High	Faces significant tariff impact
Machinery & mechanical items	High	Competitors also affected
Gems & jewellery	Low	Demand is inelastic, so impact is less
Mineral fuels	Moderate	These are refined oil products re-exported after processing
Pharmaceuticals	No Impact (currently)	Not yet subject to the 26% tariff
Iron & steel articles	Moderate to High	Subject to new tariff
Made-up textiles	High	Faces significant tariff impact

Global Competitors & Tariff Comparison

• India’s competitors in these export categories:
  • China, Vietnam, Cambodia, Bangladesh
  • These countries face even higher reciprocal tariffs than India
• South Korea, a competitor in electronics, faces a 25% tariff, very close to India’s 26%

Global Trade Reactions: A Caution for India

• China has imposed reciprocal tariffs on U.S. goods.
• The U.S. retaliated strongly, raising China’s overall tariff rate to 145%, and up to 245% for some goods.
• This shows that a confrontational approach may not be good for India.

Recommended Indian Strategy: Multi-Pronged Approach

1. Understand India’s Imports from the U.S.

• India mainly imports essential goods from the U.S.
• Putting extra tariffs on these could make them more expensive domestically.

2. Adjust Import Sources to Lower Reciprocal Tariff

• If India increases imports from the U.S. where it makes economic sense:
  • The reciprocal tariff rate India faces will reduce.
• Example:
  • Increase imports from the U.S. by $25 billion (e.g., shift oil imports from other countries to the U.S.)
  • New reciprocal tariff rate = 11.8% (close to the floor rate of 10%)
  • This helps improve competitiveness without increasing the current account deficit

Policy Suggestions for India

• Start quick consultations with U.S. trade officials to build a comprehensive trade deal.
• Keep an eye on “dumping” (selling goods at low prices) from countries like China, which may try to redirect exports to India due to U.S. tariffs.

Conclusion: WTO must take the lead

It is clear that the U.S. tariff move is just the first step. The rules on global trade and tariffs will likely stay uncertain for some time, which is bad for international trade and economic growth. Going ahead, we need a global trading system with low tariffs. The World Trade Organization (WTO) should take strong steps to make this happen. Regional trade groups are only a second-best option, but they should still be encouraged.

Editorial 2: Call for permanent settlement for tribals 

Context

Most of the displaced tribals, especially the younger generation, are drawn to better economic opportunities in Andhra Pradesh and Telangana.

Introduction

In 2005, around 50,000 Gond tribals were forced to move to then-undivided Andhra Pradesh (now parts of Telangana) when the Government of India started the ‘strategic hamleting’ program, a method used in south Vietnamin the 1960s, to remove Maoists in Chhattisgarh. However, the project failed. The tribals, who were relocated to roadside camps, have mostly returned to the deep forests, while some, who couldn’t go back due to fear of Maoists, joined the security forces.

• Some displaced tribals now play a key role in the military successes against Maoists in Chhattisgarh.
• Many Maoists who surrendered have joined them.
• Unlike central paramilitary forces and local non-tribal police, these tribals are familiar with the language and terrain of the area.
• They have proven to be game-changers, especially for Home Minister Amit Shah, who has stated that the war against Maoists will end by March 31, 2026.

The Strategic Hamlet Program

• The Strategic Hamlet Program to fight communist revolutionaries is not new in India.
• Post-Independence (1949), the Government of India moved tribals from forests to roadside camps to fight the Telangana communist revolutionaries after the surrender of the Nizam.
• Hundreds of tribals were recruited as “special police constables” to fight the communist dalam groups.
• These tribals had basic weapons (spears, axes) and no military training.
• A special group of Koya tribals, known as the “Tiger Squad”, had around 300 members.

Success of Strategic Hamlet Strategy

• The strategy was more successful in Mizoram during the 1960s, where a peace deal was eventually reached with Mizo fighters.
• In 2019, a new conflict between Mizo tribals and Bru (Reang) tribals led to thousands fleeing to Tripura, and the Government of India launched a Bru rehabilitation plan.

Challenges for Gutti Koya Tribals

• Gutti Koya tribals, living in Andhra Pradesh and Telangana, have faced difficulties for nearly 20 years.
• They occupy illegally seized forest land and have received no state support.

Displacement and Statistics

• 10,000 Gond tribals displaced due to violence in Chhattisgarh now live in other states, most not wanting to return.
• Telangana reports 24,000 displaced tribals, and Andhra Pradesh reports 8,000.

Government Response

• The National Commission of Scheduled Tribes (NCST) has ordered a survey of displaced people in three months.
• A similar order was given in 2019, but the survey couldn’t be conducted due to COVID-19.
• The Chhattisgarh government previously denied the displacement, stating no tribals had been displaced due to violence.

Issues Faced by Displaced Tribals

• Tribals face atrocities from forest officials, police, and local tribals who view them as encroachers.
• Maoists prevent them from returning to their homes.
• State authorities in Andhra Pradesh and Telangana are unwilling to recognize them as tribals.

Legal Issues: Forest Rights Act (FRA)

• Clause 3.1(m) of the FRA states that if a tribal person had to leave forest land before December 13, 2005, they should be given alternative forest land.
• Many displaced tribals in Andhra Pradesh and Telangana have applied for alternative forest land, but Chhattisgarh has not processed these applications for over five years.
• Chhattisgarh has not engaged with the Ministry of Tribal Affairs or the governments of Andhra Pradesh and Telangana about these applications.

Comparisons to Bru Rehabilitation Plan

• Under the 2019 Bru Rehabilitation Plan, Bru tribals were given the choice to return to Mizoram or stay in Tripura with limited support.
• A new generation of Gutti Koya tribals has grown up in Andhra Pradesh and Telangana, but they are denied tribal status.

Request for Central Intervention

• Both Andhra Pradesh and Telangana provide humanitarian support but refuse to treat the tribals as officially recognized tribals.
• NCST representatives have requested Central Home Ministry intervention to address the issue of Internally Displaced People (IDPs) and provide them the necessary support.

State	Displaced Tribals	Issues Faced
Chhattisgarh	10,000	Violence, displacement, and lack of rehabilitation
Telangana	24,000	Reluctance to treat as tribals, no state support
Andhra Pradesh	8,000	Similar issues with state recognition and support

Conclusion

Many displaced tribals, especially the younger generation, are drawn to the better economic opportunities in Andhra Pradesh and Telangana and want to stay. Telangana has taken over their farmland, planting trees to push them back to Chhattisgarh, while Andhra Pradesh has destroyed any attempts to build new homes in the forest. Although the courts have sometimes helped, the tribals are seeking a permanent settlement for a dignified life for the new generation.