Rajeev Narayan

Much like the Devil’s Alternative, Hobson’s choice was born under duress. It came into being in the 17th century, when Thomas Hobson, a Cambridge carrier who hired out horses, offered customers only one choice: take the horse closest to the stable door, or none at all. Nearly 300 years later, India faces a similarly daunting decision in its dealings with a tariff-hungry United States. Should it jump astride a wild stallion that snorts and bucks in anger, or go horseless?

It is a tough call. The 50 percent tariffs imposed on Indian goods to the US by President Donald J Trump will not only lead to a potential Rs 217,000 crore in lost revenues, but they will also sound a near-death-knell for sectors of India’s domestic industry like Apparel, agriculture, chemicals, gems and jewellery, footwear, auto parts, and much more. And as small industrial units across India shut down over the next few months, 20 lakh employees will be rendered jobless.

India’s Available Options

What are the options for India? It has already announced that it will increase trade with Europe and South-East Asia, lowering its export exposure to the US; at last count, this was 20 percent of all exports. Another option is to sit at the table with the US and sort out the matter diplomatically. There is a catch here; the US is adamant that India kill its crude oil purchases from Russia. If that is not done, tariffs on India will keep going up, the US has warned. Incidentally, the next tariff figure being flaunted is 70 percent.

What of the options India has played out? It has refused to accept that Trump brokered peace in the military standoff with Pakistan after Pahalgam. Oil procurement from Russia also continues, which has led the blustering US administration to call the Russia-Ukraine war ‘India’s War’, even as the US forgets that a bulk of Ukraine’s funding comes from its own treasury. India has refused easy market access to US dairy and agricultural products. In hindsight, these issues—delicate in nature—should have been handled with clever diplomacy, not in the brusque manner that has irked the US. Also, statements from India could have been coined more tactfully.

And as if tariffs and their impact weren’t enough, the misery is being aggravated by some Indian Chief Ministers walking the streets with their brood, pasting ‘Buy Swadeshi’ posters on kirana store walls. This has made customers wary of buying foreign biscuits, even Coke and Pepsi. Shop-owners are also worried their premises may be vandalized by ‘hawks’ who are positioned carefully and watching every move. The need of the hour is not bravado and machismo. India has to unsheathe a sword of diplomacy and sensibility, waving the sharp object around without cutting anything, not even ice.

Countries like Japan and Brazil have escaped the US wrath, getting away with low tariffs. After all, Japan has also been buying crude oil from Russia, but it has handled the US’ annoyance with sobriety, diplomacy, and humility, leading to only 10 percent tariffs. Even Pakistan has managed things well—it has put an end to a ‘war’, got an IMF dole of over Rs 10,000 crore (with more being promised), plus two free lunches at the White House.

Tit-for-Tat Temptation

A moot question is whether India can afford to indulge in retaliatory tariffs of its own. Two-thirds of top American corporations, from tech giants and financial firms to agri-businesses and pharma, have a strong presence in India. If New Delhi chooses to exercise the tit-for-tat option, the effect would be felt hard. Restrictions on US companies would also send ripples through Wall Street, where Indian markets and talent are enmeshed with US corporate fortunes.

However, retaliation comes with perils. The US economy is consumption-driven and has massive shock absorbers, while India’s growth is still dependent on exports. A protracted tariff war could hit jobs, dampen investments, and drive away capital at a time when India aspires to be the fastest-growing big economy. The lesson from history—from the Smoot-Hawley tariffs in the 1930s to the recent US-China tensions—is clear. Standoffs help no one. Retaliation provides psychological satisfaction, not long-term gain.

Diplomacy: A Crucial Lever

The prudent path lies in diplomacy: quiet, nuanced, strategic. India should leverage multilateral platforms like the World Trade Organization and challenge the arbitrary imposition of tariffs by the US. Simultaneously, it can engage Washington bilaterally, stressing on the mutual benefits of trade. For every dollar that India exports to the US, American companies export nearly the same amount in services and manufactured goods to India. The interdependence is undeniable.

India can also explore butch bargains—greater regulatory openness for US firms in non-sensitive sectors in exchange for tariff relaxation, joint ventures in renewable energy or digital technology, and a phased roadmap on oil diversification. Such bargains will allow both sides to claim victory without appearing to have capitulated. This becomes very relevant in an election-driven political atmosphere, where optics matter as much as substance.

India’s position requires careful calibration with other powers. The European Union is keen to cement a free trade agreement with India, which would reduce our over-dependence on the US market. Also, South-East Asia remains a natural choice for diversification, not only in trade but in strategic balancing as well. By broadening engagement, India can show the US that its market access is not exclusive and that alienation may be counterproductive. At the same time, India cannot afford to rupture relations with the United States beyond repair. The two nations share synergies in defence cooperation, digital technology, and counter-terrorism. The challenge lies in protecting these convergences while negotiating divergent interests in trade. A delicate balance must be struck between asserting sovereignty and preserving partnership.

Choice(s) Before India

Hobson’s choice, when stripped to its core, is about compulsion masquerading as choice. India today faces a compulsion—that of accepting punitive tariffs silently, retaliating rashly, or walking a middle path. Retaliation may be tempting, but its costs could outweigh the symbolic satisfaction it delivers. Submission, on the other hand, would undermine sovereignty and long-term economic credibility.

The wiser course lies in calibrated diplomacy… engage, negotiate, and diversify. India needs to demonstrate that it is neither a passive victim nor an impulsive aggressor, but a mature power capable of protecting its interests through patience and pragmatism. In the 17th century, Hobson’s Choice made customers take the horse closest to the stable door. India must show it has the smarts to tame the stallion, as also the skills to ride to a future where economic resilience and diplomatic dexterity define its destiny. The silver lining is that such a future would provide India far more than symbolic satisfaction.

The writer is a veteran journalist and communications specialist.