Trump Has Pushed India to the Wall. He May Be Doing It a Favor

History shows that the country takes its best decisions when it has no other choice.

- Ravi Velloor

US President Donald Trump's whimsical approach to tackling what he sees as Indian recalcitrance to bow to his diktat and curb Russian oil purchases—which would help pressure Moscow on Ukraine—has seen him slap a combined 50 percent tariff on Indian goods imported into the US.

The latest reports suggest that India and the US are about to sit down to negotiate the final stretch of a bilateral trade agreement that should be announced by the first week of October. Emollient exchanges between Mr. Trump and Prime Minister Narendra Modi over the last weekend notwithstanding, it is clear that New Delhi will need to make significant concessions in order to protect an estimated US$60 billion (S$77 billion) of the US$87 billion it exports to the US.

In likely wringing a lowered tariff regime from New Delhi, Mr. Trump may unwittingly be doing India a big favor. On trade, he could likely prise open a market which has seen tariffs actually rise since 2015, and one that failed to prepare for competition by using the time it bought for itself by withdrawing from trade deals like the RCEP to introduce meaningful market reform.

His moves have already prompted a rethink in India, which could eventually work to its advantage.

Strategically, by placing roughly the same amount of tariff upon it as it has on China, which the US has dubbed a strategic rival, Mr. Trump has primed New Delhi to proceed more cautiously with its steady embrace of Washington and hew closer to its traditional non-aligned line, now refashioned as multi-alignment. Mr. Modi's diplomatic outreach to Beijing suggests awareness that geography is not easily transcended. Renewed efforts to clinch a swift trade deal with the European Union—first considered in 2007—will widen India's trading options once accomplished.

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