DC Edit | Will Trump-Modi Vibes Help Reset US-India Ties?
It is a no-brainer that the issue of India being on the highest tariffs slab along with Brazil will be decided solely by the US President
India has been offered another olive branch by Donald Trump whose tone regarding India appears to have changed to the positive. His mood swings sported movement of a pendulum on a grandfather clock that swings to and fro in an unending cycle. But, in the space of four days, the US President has at least been consistent in saying twice that he would always be friends with Prime Minister Narendra Modi and that the US and India have a special relationship.
The hint that stalled trade negotiations are to resume may be music to the ears of Indian exporters, some of whom will be the worst affected if the tariff and sanction on Indian goods to the tune of 50 per cent plus stays on. Given US court rulings on tariffs and the reluctance of the Supreme Court to take up a review soon, Trump himself might be under pressure as the legality of his great bargaining tool — tariffs — is yet to be established beyond doubt.
It is a no-brainer that the issue of India being on the highest tariffs slab along with Brazil will be decided solely by the US President. Hence, the soundest advice India could get was that the Prime Minister follow the [Volodymyr] Zelenskyy playbook by flattering Trump to get back into his good books. Of course, the Ukrainian leader had a multitude of European and UK heads of government with him when he tackled a second White House visit after the first had backfired on him.
Flatter Trump but resist when it comes to the red lines in trade negotiations would have to India’s approach to setting right the trade glitch that came with the purchase of discounted Russian oil, which has served the nation well in the last few years since the outbreak of the Ukraine war. While that oil, which is not available far below comparable market prices now, might have become a prestige issue in India-US relations, India need not sacrifice it altogether until all trade issues are sorted out.
The bumps have not lain only in the high tariff barriers for goods as the US has also moved against India on several fronts like visas and is wildly contemplating a tax that could affect software exports and offshore work outsourcing. Maybe, demonstrating to the US that it is only in the trading of goods that India enjoys a surplus whereas the US has the far bigger surplus from services might just help Trump see the bigger picture.
This is where the talks between President Trump and Prime Minister Narendra Modi on video phone calls that are said to be coming up soon assume greater importance. And they need not be just about the trade deal that is supposed to be completed before autumn, the deadline given after they met at the White House last February. The whole gamut of ties, from strategic partnerships, defence and oil and gas purchases to trade and tariffs calls for a serious dialogue.
India would do well to remember that certain red lines in open trade like protecting the farming and dairy sectors cannot be crossed just to facilitate the lowering of tariffs. But the availability of wider global options as India may have demonstrated at the Tianjin summit from where the optics of a game of power chess played by non-Western leaders may even have contributed to a pushback in the US towards Trump’s hard line on India alone. The time to set things right with the US is now.