Prime Minister Narendra Modi on Saturday addressed the ongoing economic debate that has captured both national and international attention, urging Indians to remain “vigilant” about the country’s economic interests. His comments came shortly after former US President Donald Trump made a controversial statement labelling India a "dead economy" in the backdrop of rising trade tensions between the United States and India.

Speaking at a public rally in Varanasi, the prime minister emphasized that India is well on its way to becoming the third-largest economy in the world, and therefore, economic priorities must be safeguarded. “India is set to become the world’s third-largest economy… therefore, India must remain vigilant about its economic interests. Our farmers, our small industries, employment for our youth… their interests are paramount for us,” Modi declared. He further stated that every government effort is being directed toward this goal.

This statement followed a sharp post from Donald Trump, who reignited economic tensions with a public criticism. Trump wrote on social media:

“I don’t care what India does with Russia. They can take their dead economies down together, for all I care. We have done very little business with India, their Tariffs are too high, among the highest in the World..."

This sparked a national political debate, with Congress leader Rahul Gandhi latching on to Trump’s comments. Gandhi used the term "dead economy" to attack the Modi government, stating:

“I am glad President Trump has stated a fact. Everyone knows the Indian economy is a dead economy, everyone except the Prime Minister and Finance Minister.”

However, not all opposition leaders backed Gandhi’s interpretation, leading to internal disagreements within the opposition ranks.

Global Instability and India's Economic Stance

Modi also touched on the global economic instability and emphasized the need to support ‘swadeshi’ products. “Those who want the best for the country, be it any political party, should leave their differences aside and instill a resolution for ‘swadeshi’ products. We will buy only those things that are made by Indians. We need to become vocal for local," the Prime Minister said, reinforcing the Make in India sentiment.

In this environment of escalating trade wars and protectionist policies, Modi reiterated India’s position as a self-reliant and globally significant economy, underscoring the role of MSMEs (Micro, Small, and Medium Enterprises), farmers, and youth-led entrepreneurship in fueling India's growth.

Government’s Economic Defense

Commerce Minister Piyush Goyal, responding to questions in Parliament, strongly defended India's economic trajectory. He stated:

“In less than a decade, India came out of the ‘Fragile Five’ economies and has now become the fastest-growing economy in the world. On the basis of reforms, the hard work of farmers, MSMEs, and industrialists, we have come in the top five economies of the world from being the 11th largest."

He emphasized that global institutions and economists view India as a bright spot in a slowing global economy, and that the country remains on track to becoming the third-largest economy.

Goyal also refuted claims of economic stagnation, suggesting that the “dead economy” remark is misleading, and cited key indicators like GDP growth, manufacturing resilience, and foreign direct investment flows as proof of India’s robust economic standing.

Trade Policy and Tariff Response

In response to Trump’s announcement of a 25% tariff on nearly all imports from India, Goyal stated that India will not compromise on national interest in trade negotiations. He reaffirmed that India continues to seek balanced trade relations but will resist unilateral actions that undermine its sovereignty.

The government also reiterated that while India’s tariff structure is designed to protect local industries, it remains compliant with WTO norms and open to mutually beneficial trade agreements.

Meanwhile, the external affairs ministry maintained that India-Russia relations are rooted in strategic and historical ties, and will not be dictated by external pressure, including that from the United States.

Opposition Divided Over Trump’s Statement

While Rahul Gandhi took an aggressive stance using Trump’s remarks to attack the Modi government, other leaders, including those from regional parties and Congress allies, took a more measured tone. Some warned against overreliance on foreign political commentary, cautioning that internal debates should not be dictated by international provocations.

Several economists also weighed in, suggesting that while India does face structural economic challenges, labeling it a "dead economy" is factually incorrect and politically motivated.

Public Sentiment and Market Response

The Indian stock markets remained relatively unaffected by Trump’s comments, though there was some volatility in FMCG and export-oriented sectors, especially those related to US-bound shipments. However, the rupee stayed stable, and investor sentiment remained largely optimistic, buoyed by robust quarterly earnings and continued FDI inflows.

On social media, reactions were mixed. Some citizens expressed concerns over India’s diplomatic positioning, while others dismissed Trump’s remarks as political theatrics ahead of the US presidential elections.

Conclusion

As global economic friction intensifies, India finds itself at a critical juncture. On one side, it is being pulled into geo-political crossfires, and on the other, it must ensure its growth trajectory remains stable and inclusive.

Prime Minister Modi’s message of economic vigilance underscores a broader strategy of economic nationalism, strategic independence, and domestic capacity building. In contrast, Trump’s provocative remarks may serve more as a political flashpoint than a reflection of economic fundamentals.

Nevertheless, India’s leadership has made it clear: the country will continue to pursue its growth ambitions, defend its trade interests, and strengthen its global economic standing, even amid external criticism and geopolitical shifts.

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