DC Edit | World In Flux: India Must See Bigger Trade Picture
It is against this background of trade deals to thwart Trumpian tariffs that the visit of his deputy J.D. Vance to India with his Indian American wife Usha and children with Hindu and Christian names assumed a greater significance
Trade deals are the flavour of the season as Donald Trump’s tariffs play ducks and drakes with the global players of the world economy. As nations bend in their avidity to sign deals to get off the tariff merry-go-round, a miffed China is holding out threats to those who are keen to sign deals with the US at the expense of its interests.
It is against this background of trade deals to thwart Trumpian tariffs that the visit of his deputy J.D. Vance to India with his Indian American wife Usha and children with Hindu and Christian names assumed a greater significance. The voice of Trump’s deputy must also count with his boss who has myriad other advisers, of whom one is the richest man in the world.
The optics of the meeting with Mr Vance and his family could not have been more congenial as the Prime Minister Narendra Modi took delight in interacting with their young kids too and projecting a softer image in the process. And the Vance family will also be having a run of picture postcard-like Indian tourist destinations.
In most recent times, India has sought to make its ties with the United States a pillar of its foreign policy strategy just as the USA looked to India to counterbalance China. The strength of those ties is reckoned to be as important as the $41.18 billion trade surplus that India enjoyed with the United States last year and because of which it was one of the countries targeted with reciprocal tariffs that have been put on hold for 90 days to July.
The importance of pleasing Trump to avoid altogether or soften the proposed tariffs at 26 per cent or higher can never be stressed too much. And the India-US trade deal, titled BTA, is taking aim at being mutually beneficial while focusing on the welfare of the people of the two countries.
Considering the interests of Indian traders and the country’s countless farmers, the cost of computing the sacrifices, including a big cut in tariffs on high-end motorcycles like the Harley Davidson, and bourbon whisky, might be a slippery slope. Even then India is bent upon delivering an interim trade deal before the threatened tariffs kick in. Only time will tell what the real costs will be, especially on dairy farmers if the dairy sector were to be thrown open to the US.
The one thing that Indians cannot lose sight of is the price of concentrating hugely on pleasing Trump with a trade deal and through that attempting to preserve the strategic ties that have developed so well. While a favourable surplus in India-US trade seems such a tricky issue to be addressed now, imagine the problem of a huge trade deficit, as in trade with China that, at 99,2 billion, is nearly $100 bn and rising.
It is vital that India looks at the bigger picture and considers responding to overtures from China’s envoy regarding his country being willing to look at the burgeoning trade surplus and do something about it, like buying higher quality Indian goods. When the world is in turmoil with the Trump tariff threats, India would be doing itself a favour if it looks at containing the China surplus. After all, this is the time of the big reset in global trade and India must look at world trade in a comprehensive way.
