Beyond the bumps and Trump

It is no smooth sailing for India-US trade talks, but both governments are pushing to meet the deadline

- BY K. SUNIL THOMAS

People have never really used trade the way I've used it—that I can tell you!” Donald Trump recently said in his best ‘Wolf of Wall Street’ transactional style, on how he made India and Pakistan settle for a ceasefire.

While the amount of truth in the claim is questionable, what is not at all in doubt is how the US president has managed to make trade the pivot that makes the world go round.

A war by any other name would be fought just as bitter, and that is exactly what is happening today—trade wars trumping everything else. “Strategic interests and economic interests are closely aligned,” said Rahul Ahluwalia, founder-director of the Delhi-based policy think-tank Foundation for Economic Development. “In the long term, only economic strength can help us maintain strategic parity or advantage with other countries. And that can only come from economic growth.”

India is realising this the hard way. Even before Trump's ‘reciprocal tariffs,’ India was in a delicate position. On a lookout for long-term allies to make up for its opting out of the China-led RCEP trade bloc, it was lumbering along with a strategy of sewing up trade deals. It notched up a few with the likes of Australia and the UAE, but crucial negotiations with bigger trading entities like the US and the European Union meandered along, thanks to the tough negotiations by Indian bureaucrats.

So when Trump forced its hand, the timing couldn’t have been worse for India. An alarmed New Delhi scampered to expedite a deal.

India’s only solace was that China seemed worse off, with punitive duties up to 145 per cent. It saw that as a silver lining, as this could give India an advantage to dial up its positioning as an alternative manufacturing hub. But then bang came three jolts, one after the other, to form one perfect storm.