The Congress party unleashed a sharp critique of Prime Minister Narendra Modi on Thursday, accusing him of failing to navigate India’s escalating geopolitical and economic challenges with China, America, and Pakistan—collectively dubbed the "CAP" crisis. The remarks, led by Congress general secretary Jairam Ramesh, come in response to U.S. President Donald Trump’s announcement of a 25% tariff on Indian imports, effective August 1, 2025, coupled with a penalty for India’s purchase of Russian oil and military equipment.
Ramesh took a swipe at Modi, contrasting his earlier focus on domestic price challenges—Tomato, Onion, Potato (TOP)—with the current international pressures. “Prime Minister Modi once spoke of the TOP challenge in prices. Now India has to contend with the political challenge arising out of CAP (China, America, Pakistan),” Ramesh said in a statement. He accused Modi of banking heavily on personal ties with Trump and Chinese President Xi Jinping, only to be outmaneuvered by leaders exploiting Modi’s “gigantic ego and self-obsession.”
The U.S. tariff hike, announced on July 30, 2025, targets all Indian goods and includes an unspecified penalty for India’s trade with Russia, marking India as the first country to face such a penalty despite China being Russia’s largest oil importer. Trump also imposed sanctions on six Indian companies for dealings with Iran and pledged U.S. support for Pakistan’s oil and gas exploration, alongside backing Pakistan’s bids for World Bank and IMF funding. These moves, Ramesh argued, signal a strategic tilt toward Pakistan, including Trump’s claim of halting “Operation Sindoor” 30 times since May 10 and hosting Pakistan’s Army Chief, linked to the Pahalgam terror attacks, for a White House lunch on June 18.
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The tariff escalation is seen as a U.S. pressure tactic to extract trade concessions from New Delhi, following successful deals with Japan, the UK, and the EU. Trump labeled India’s trade policies “most strenuous and obnoxious,” justifying the 25% tariff and additional penalties. This has sparked concerns about India’s export-driven sectors, such as pharmaceuticals, textiles, and IT services, which could face reduced demand in the U.S. market, raising costs for American consumers.
Congress and other opposition parties slammed Modi’s diplomacy, arguing his rapport with Trump has yielded little. Ramesh invoked former Prime Minister Indira Gandhi, urging Modi to adopt a tougher stance against the U.S. Analysts warn that India may pivot to strengthen ties with the EU, China, or Russia to offset U.S. market losses, potentially reducing American influence. Meanwhile, India’s high tariffs, averaging 17% compared to the U.S.’s 3.3%, remain a sticking point, with Indian farmers wary of trade deals that could expose them to cheap U.S. agricultural imports.
As India navigates this “CAP” storm, the Modi government faces pressure to balance domestic interests with international demands, with the outcome likely to shape India’s global economic and geopolitical standing.
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