New Delhi, Sept. 8 -- The United States' decision to impose a 50 per cent tariff on a wide range of Indian exports is more than a bilateral trade dispute-it is a stress test for India's external sector with implications for the broader South Asian economy. Exports to the US constitute a major source of foreign currency, while remittances-totalling USD 137.7 billion in 2024-remain a lifeline for millions of households. Any major disruption in either could ripple across regional supply chains, reduce employment-linked inflows, and shift trade advantages toward competitors like Bangladesh.

External Pressure, Not Crisis

First, the good news. Despite these headwinds, India is far from a balance-of-payments crisis. Foreign exchange reserves o...