Tariff War:Trump is obsessed with ‘tariff war’! If India wants, it can crush the dollar; these are big pawns in its hand

For this, it has big pawns in its hands.

What options does India have to respond to Trump’s Tariff: Due to his madness, US President Donald Trump has announced to increase the tariff (import duty) imposed on India from 25 percent to 50 percent. Trump says that until India stops importing oil from Russia, this tariff will keep increasing. In a way, Trump is directly threatening India that if you do not work according to us, we will destroy you. But is it really possible in today’s environment to make a big economy like India and the world’s fastest growing economy dance to your tunes by threatening it? So the answer is no.

Can India make up for the dollar?

According to geopolitical experts, India has such cards in its hand that can crush the dollar, which is called the backbone of America. Till now India was slowly strengthening its currency rupee at the international level. Now, if Trump’s madness gains momentum, then India can speed up this process. The faster the Indian rupee progresses in the world, the more the dominance of the dollar will decrease. This will not only reduce America’s threat in the world but its power to punish other countries economically will also be weakened. Let us know how India can do this.

Modi government had already understood the future

According to foreign policy experts, India has taken several strategic steps in recent years to reduce its dependence on the US dollar and increase trade with other countries. In fact, India had already understood that the US is not trustworthy and in case of deteriorating relations, it can harm it by using economic sanctions. Therefore, as soon as it came to power, the Modi government started trying to increase business with other countries by bypassing the dollar, the positive results of which are now coming to the fore.

Do business in mutual currency by bypassing the dollar

For this, India has taken the initiative to start trade in rupees with about 30 countries. The countries that have made agreements with India to do business in mutual currency include countries like Russia, the United Arab Emirates, Sri Lanka, Mauritius, Bangladesh, Maldives, Nepal, Bhutan, Kazakhstan, Oman, and Kenya. For example, India and Russia have adopted the rupee-ruble trade mechanism, due to which the need for dollars in mutual trade has now decreased, or it can be said that the dollar is gradually disappearing from the business of both countries.

Free trade agreements with other countries

To evade US sanctions, India is continuously entering into free trade agreements with many countries and regional groups. Such agreements bind both countries and cannot take any step that harms them economically at the behest of the US or any other third power. These agreements are also helping in increasing trade with other countries. It is also helping in reducing trade barriers.

The use of alternative currencies is on the rise

To reduce dependence on the dollar, India is paying for major imports like crude oil in the currency of the respective countries. This is saving foreign exchange (dollar) reserves and increasing the demand for the rupee. The advantage of this is that when these countries have to order goods from India, they also pay in Indian currency rupees instead of dollars. For example, India has started transactions in local currencies for oil purchases with the United Arab Emirates.

Promotion of barter with smaller countries

India has promoted the barter system with countries where there is a currency crisis. In this system, goods are exchanged without using the dollar. This includes Sri Lanka and Maldives. In this, goods manufactured in these countries are purchased in India and in return other goods are exported to those countries. By doing this, the dollar is slowly being phased out in business with these countries.

Diversification in foreign exchange reserves

Dollar is still the main currency of foreign exchange reserves in India and all over the world. But in view of the uncertain and threatening strategy of America, India is constantly trying to diversify its foreign exchange reserves. It is constantly adding other currencies besides dollar in its reserves, such as Euro, Pound Sterling and Japanese Yen. This diversification is increasing the stability of Rupee. Along with this, America is also being given such a silent reply that it can do nothing except stare at it.

Digital Payments and Use of UPI

To strengthen the rupee in the world and bypass the dollar, India is constantly promoting digital payments and UPI. Many countries including France, Maldives, Sri Lanka, UAE have adopted India’s Unified Payments Interface (UPI). Due to this, when going to these countries for business or tourism, transactions can be done easily in rupees instead of dollars. Due to this, the credibility of the rupee is increasing rapidly at the international level.

These challenges still remain

These efforts are helping in reducing India’s trade deficit and strengthening the rupee at the international level. But there are some challenges too, which India will have to overcome. These challenges include the dominance of the dollar at the global level, instability of the currencies of other countries and complexities in trade agreements. Despite this, India’s self-reliant approach and alternative trade mechanisms are making it a strong player in global trade. This is what is constantly bothering America, which is now coming out in the form of Trump’s anger.