Basic HTML Version

|  | Table of Contents |  | View Full Version

Page 34 - The Indian EYE 110725
P. 34

    BUSINESS & TRADE                                                  NOVEMBER 07, 2025        |  The Indian Eye 34

             India–US Trade Deal: Big Promises, Bigger

                Problems as Talks Enter a Critical Phase

             As Washington and New Delhi inch closer to a long-awaited trade pact, optimism is tempered by structural imbalances, tariff
              politics, and shifting global alliances that threaten to complicate one of the world’s most important economic relationships

            OUR BUREAU
            Washington, DC / New Delhi
                  t  the  Asia-Pacific  Economic  Cooperation
                 (APEC) CEOs Luncheon in Gyeongju,
            ASouth Korea, US President Donald Trump
            made headlines not just for his flamboyant remarks
            about Prime Minister Narendra Modi — whom he
            called “the nicest-looking guy” and “a killer” — but
            for hinting at an “imminent” trade deal between
            the world’s largest and fifth-largest economies. His
            comments, a mix of praise, personal anecdotes,
            and  geopolitical  posturing,  reflected  the  high-
            stakes complexity that now defines India–US trade
            negotiations.
                Trump’s speech came laced with characteristic
            bravado. He claimed to have personally defused a
            potential nuclear confrontation between India and
            Pakistan earlier this year, linking his intervention
            directly to trade talks.  “I  called  Prime  Minister
            Modi and said, ‘We can’t make a trade deal with
            you if you’re starting a war with Pakistan.’ He said,
            ‘No, no, we must make a trade deal,’” Trump re-
            counted, framing diplomacy and trade as part of   U.S. President Donald Trump speaking on the aircraft carrier USS George Washington during his visit to the U.S. Navy’s
            the same power equation.                                         Yokosuka base, in Yokosuka during his Asian tour (Reuters/ANI Photo)
                While the theatrics caught global attention,
            beneath the surface lies a serious and long-run-
                                                             This shift underscores India’s growing role
            ning economic negotiation. The United States and   as both a trade partner and a competitor in the   firmness  toward  Modi  adds  a  human  dimension
                                                                                                       to an otherwise technical negotiation. “He looks
            India have been locked in trade discussions for   post-China global economy. For Washington, the   like you’d like to have your father,” Trump said of
            several years, attempting to reconcile differences
            over tariffs, market access, digital commerce, and   data serves as both a warning and an opportunity:   Modi, before quickly adding, “but he’s a killer —
                                                                                                       tough as hell.”
                                                          a warning that tariffs alone cannot rebalance trade,
            agricultural goods. Each round of talks has raised   and an opportunity to engage India as a manufac-  This blend of admiration and aggression en-
            hopes of a breakthrough but ended with incremen-  turing alternative in the global supply chain.  capsulates  how Washington  views New  Delhi:  a
            tal progress at best.                            India continues to seek greater access for its   partner too important to alienate, yet too indepen-
                       BALANCE OF TRADE                   exports — especially in pharmaceuticals, textiles,   dent to easily bend. Modi’s image as a nationalist
                Meanwhile, a recent report by the State Bank   and IT services — while the US pushes for reduc-  reformer has made him popular with Indian vot-
            of India (SBI) underscores the changing contours   tions in tariffs on goods like Harley-Davidson mo-  ers and credible on the global stage — but it also
            of the economic relationship. Despite Washing-  torcycles, dairy products, and agricultural imports.   makes concessions to  foreign  powers  politically
            ton’s aggressive tariff strategy, the US trade deficit   Washington also wants stronger commitments on   sensitive.
            with several top partners — including India — has   intellectual property rights and data localization   The  potential  benefits  of  a  comprehensive
            widened.                                      rules, issues on which New Delhi has stood firm to   trade agreement are enormous. For India, greater
                Between April and July 2025, America’s over-  protect domestic interests.              market access in the US could boost exports, at-
            all trade deficit shrank by USD 42 billion. Yet, its   Economists argue that both nations are pursu-  tract investment, and strengthen its position as a
            deficit  with  key  partners  such  as  India,  Mexico,  ing “asymmetric goals”: India seeks to safeguard   global manufacturing hub. For the US, the deal
            Vietnam, and Taiwan actually rose by USD 9 bil-  its developing economy and local industries, while   could help diversify supply chains away from Chi-
            lion, reaching USD 257 billion in total trade value.  the US is driven by domestic political imperatives   na, open up India’s vast consumer market, and ce-
            For India alone, the deficit jumped from USD 17   and the need to showcase export gains. Trump’s   ment strategic influence in South Asia.
            billion to USD 23 billion within just a few months.  tariff-driven policies, though popular among some   But  the  obstacles  remain  formidable.  Differ-
                The numbers tell a complex story. The tariffs   American manufacturers, have failed to deliver   ences over agricultural subsidies, data regulation,
            imposed by Washington may have succeeded in   uniform results across markets — particularly with   labour standards, and environmental commit-
            curbing the overall deficit, but they have also shift-  partners that are structurally different from China.  ments have repeatedly stalled progress. India’s
            ed  trade  imbalances  rather  than  resolving  them.                                      insistence on protecting its farmers and small
            While  the  US  reduced  deficits  with  traditional   POLITICS OF PERSONALITY             businesses clashes with Washington’s demands for
            partners like China and Switzerland, new gaps    In many ways, the trade equation between In-  open markets. Likewise, US tech companies re-
            have emerged with emerging economies — India   dia and the US mirrors the chemistry between their   main wary of India’s tightening digital sovereignty
            included.                                     leaders. Trump’s unpredictable mix of flattery and   laws, which require data to be stored locally.

                                                                   www.TheIndianEYE.com

| 29 30 31 32 33 34 35 36 37 38 39 |