India, Sept. 4 -- Indian exports to the US now face 50% tariffs. No other country in Asia has tariffs this high. Many leaders of the ruling dispensation have attempted to downplay the impact of these tariffs on Indian businesses by stating that India is a domestic consumption-led economy and that Trump's tariffs will not have a significant impact domestically. However, the reality could be very different.

The immediate impact can be gauged from the stock market, where benchmark indices closed August in the red. This is part of an overall sentiment of under-confidence, which was also demonstrated in the massive outflows by Foreign Institutional Investors (FIIs), who have preferred other emerging markets.

In terms of the direct impact on ...