Follow-through Will Be Trump's Test for India

Not since the nuclear deal has there been as much pressure on the Indian system to walk the talk on the US relationship

- Prashant Jha

Prime Minister (PM) Narendra Modi confronts problems directly. His visit to Washington DC, straight into the lion's den, was proof of Modi's willingness to do so. And it paid off. The visit went off without any embarrassing incident, a fact that can never be taken for granted when Donald Trump is around. Trump was more personally effusive about Modi than he is about foreign leaders. And the joint statement laid out a truly ambitious blueprint to deepen defence, economic and technology ties.

But pleasing Trump involved making serious commitments that will test Indian economic policymakers, the defence establishment, and the political leadership in the next six months. Trump is likely to make his visit to Delhi and appearance at Quad contingent on the deliverables on the bilateral stage.

The first test for the economic establishment involves working with Trump's team to arrive at the first tranche of a bilateral trade agreement (BTA). Don't assume this is just about reducing tariffs, which in itself will be a challenge given political sensitivities. And don't assume that buying more energy by itself will make Trump happy. Trump's order on reciprocal taxes factors in the entire menu of policies that can be seen as favouring domestic businesses over foreign businesses (subsidies, tax regimes, regulatory actions). The United States (US) has its eyes on India's data rules, treatment of American e-commerce and tech companies, and any non-tariff barrier that can be remotely interpreted as distorting a "level playing field".

This is not about whether Trump is right or wrong—the hypocrisy inherent in America turning protectionist and asking India to open up more is glaring. This is not about whether the external push may well result in helping the Indian economy and indeed the economy does need a reboot and more openness to draw investment.