Needed: A win-win trade deal

The stakes for India and the US are very high

- AJAY CHHIBBER

Swami Vivekananda said it best: "We enter the world like a gymnasium, to make ourselves strong." But the world trading system — under Donald Trump's whimsical tariffs — is beginning to resemble a wrestling mat rather than a gymnasium. Mr Trump has managed to swing trade deals in his favour by negotiating with each country individually. Even the 27 collective countries of the European Union — despite having a much larger market than the United States — have caved in to his pressure. So far, only China has stood up to him, leveraging its monopoly in rare earths.

India, whose prospects of a trade deal with the US looked promising after Prime Minister Narendra Modi's rushed visit to the White House in February, is now facing a 25 per cent tariff and an additional 25 per cent penalty for importing Russian oil. This is much worse than the 10 per cent tariff imposed on the United Kingdom, the 15 per cent levied on the EU, South Korea, and Japan, and the 15-20 per cent range applied to most of India's competitors in East and South Asia. Even Pakistan that cleverly nominated President Trump for the Nobel Peace Prize and bought his crypto currency has come out ahead of India. New Delhi seems to have irritated Mr Trump by vehemently denying that he had a role in the recent ceasefire with Pakistan. India is now as badly off as Brazil, Switzerland, and South Africa.