DC Edit | Amid global friction, India must push for trade deals

The shifting global geopolitics in the wake of the Donald Trump ascension of January 2025 is sending countries scurrying to redefine their approach to a new world order that seems inevitable. The leaders who met Trump in his first 40 days in office were seen to be content to bend with the breeze. But, with the fear lurking that a whirlwind is likely to follow, they have been busy taking a second look at their relationships with key countries.

Adjusting to Trump is not something that Ukraine’s Zelensky could quite manage. That allowed the US president to threaten to tear asunder the very foundations of the old international order in which the USA had played the global leader, and policeman on occasion. If Trump is serious about leaving Ukraine to its own devices in the face of Russia’s invasion and continuous battering on the frontlines, then the world would have changed already, and not for the better.

Amid all this, India has had to deal with the threat of reciprocal tariffs that could undermine the healthy trade surplus it has been enjoying with one of its leading trade partners. That has sent India scrambling to look at a gamut of trade deals not only with the US, beginning with the sudden visit of trade minister Piyush Goyal this week to Washington, but also with many other leading players like the UK and the EU.

The need for firming up strategic partnerships and trade deals has become a compulsion in the wake of the change at the White House. India kicked off talk of trade deals with its largest trading partner, which is the EU block of 27 countries. Prime Minister Narendra Modi’s meeting with the chief of the European Commission, Ursula Von der Leyen, gained added significance after Trump’s decision to impose reciprocal tariffs on imported goods.

The UK has shown a keenness to kick off talks on the FTA with India on the FTA that seemed to have had a still birth in the days of Boris Johnson and David Cameron. Last year, India signed a trade agreement with Iceland, Liechtenstein, Norway and Switzerland, which comprise the European Free Trade Association, besides signing up for $100 billion investments into India.

The time to chart a path that accounts for Trump’s USA and its compulsive tariff levying mentality is now. India may have seen days when its high tariff barriers did not come in the way of trade with most partners. A need to relook might have come about now as Europe and the US would like India to reduce tariffs, to begin with, on automobiles and wines and spirits. There may be sacrifices to make, but they would probably be needed because so much has changed so quickly.

There is only so much that India can hope to control and only in facing up to that reality and taking a close look at what matters to the country, can India deal with what may come up in a world that, going forward, might or might not be with US leadership. While India would very much like to continue to lean on the US in strategic security matters despite the extractive nature of Trump’s foreign policy, it would have to tie up a trade deal to stave off menacing reciprocal tariffs. Trade deals too may come with some pain for India, but they must be pursued in the current circumstances.