Thank you very much, Donald tariffs

With the US Department of Homeland Security uploading a notification on Tuesday confirming that 25% additional tariffs on imports from India - on top of the 25% operational since Aug 7 - kick in from 9.31 a.m. today, the Trump regime is, willy-nilly, helping India gravitate to available alternative markets. Where India has a dominant position in specific export categories, it'll find it easier to reroute shipments. Alt markets are also regrouping in reaction to US protectionism. This should facilitate India's efforts to diversify its exports. A smaller subset of exports that rely on the US as their principal destination will need policy support to transition. The pattern of India's merchandise trade is diverse for exports relative to its imports. This feeds government confidence that trade deficit won't unduly suffer. The official reckoning that the effects will be transient as the economy adjusts to the shock is fairly credible.

New Delhi is preoccupied with reviving domestic consumption. This should provide some cushion for a dip in exports. Effects of income- and consumption-tax cuts are on course to cover the duration of the US export shock. Besides, services exports, where India derives most of its trade surplus, are unlikely to be affected. Likewise, remittances remain a steady source of comfort. But these flows are vulnerable to US non-tariff barriers, given the dominance of the US market. Services trade has, however, been kept outside the ambit of protectionism since the US runs a surplus with India on this account.

There are two coping mechanisms for the 25% penal tariff for buying Russian oil. India could reduce or increase imports of cheap Russian oil to keep its energy trade in balance. The particular course will suggest itself as the politics unfolds. Whatever course it adopts will have a bearing on the global energy market. This limits Washington's options to use trade restrictions on New Delhi as a lever against Moscow. Here's a swell opportunity, then, to demonstrate the limits of Trumpian protectionism.