Tag: trump

India relies on a friendly USA for progress and peace – but Trump is making this difficult

INTO INDIA last month asked this question – can the USA-India releationship survive President Trump?

This month the answer is even less certain.

New Delhi has some fears on this front – knowing that India’s growing economy and innovation needs a friendly USA. Even more so, the India-USA relationship is a key to ensuring an Asia NOT dominated by China.

India wants agreement with the USA.

Without some effort from Washington, India will just have to find new relationships to secure its position in Asia.

 If India and the United States become more distant to each other, both would have a weaker hand to play when it comes to China.

India is anxious to reduce its reliance on China as a source of supply and also its reliance on the USA as a source of demand.

Trump is softening his approach to China while he goes harder on India.

There are serious levels of concern in New Delhi about this.

First, the China border problem continues to fester.

Second, both the USA and China are moving closer to Pakistan = which is also a volatile border for India.

Corporate India seems to have made up its mind – several of India’s largest corporations are seeking a presence or partnerships in China.

But political India continues to look for new friends.

Can the India-USA relationship survive President Trump?

We have just had 25 years of India and the USA gradually getting closer together.

But claims from US commentators that the two countries have “shared values” and “shared interests” have shown that they miss the point about India.

In the last 25 years India has been engaging with “the world” and has seen the USA as just one among many – it is today, for example, much closer than ever to countries like China, Japan and Russia.

When India joined the “Quad” (USA, Japan, India and Australia) it was celebrated in the USA (and to some extent Australia) as if India had “changed sides”. It had done no such thing.

In fact, within one week of attending a recent Quad meeting, Indian PM Narendra Modi was also high profile at the Shanghai Cooperative Organisation – the world’s largest regional organisation in terms of geographic scope and population, covering approximately 24% of the world’s total area and 42% of the world population.

At heart, this misunderstanding arises from the dramatic differences in world view of the USA and India. The USA and many of its partners see you as being on their side or against them. India, by contrast, takes a more universal view and sees many polarities, many arrangements and alternatives.

In addition, India is not generally evangelical on “democracy” and certainly does not see its mission as imposing democracy on others. It tends to accept others as they are.

Today India faces a 50% tariff from the USA, imposed, it is said, because India continues to buy oil from Russia, which is at war with Ukraine.

On this and other issues with the USA, India takes a quiet non-confronting line – understanding that anger is unlikely to work where reason has failed.

India’s favored policy of “Mult alignment”—seeking friends everywhere while refusing to forge clear single country alliances – is aggravating and confusing to Washington but is an obvious outcome of the Indian world view.

INTO INDIA predicts that the Indian response to Trump’s tariffs and rough tactics will lead to India seeking more diverse trade relationships and to be even more active in building multi alignments.

It’s just a matter of how you see the world.

What do you think?

Trump’s “transactional and mercantilist” approach to trade will test India in 2025

India at risk as Trump’s trade policies do not distinguish between friend and foe.

One certainty of 2025 – the terms of trade are set to change.

For India, this presents a major economic risk.

Trump has made trade a big focus of his second term as President of the USA – he is expected to upend the $24 trillion world goods trade and possibly the $7.5 trillion services trade.

This puts at risk India’s largest export market – the US.

The US has also been an important supplier of capital.

The US consumes as much as a fifth of India’s exports —  led by two shiny new growth spots in phone manufacture and global capability centers — and is also among the biggest sources of fund flows, reports Bloomberg’s India Edition, written by Menaka Doshi.

Australia well knows that Trump’s trade strategies do not distinguish between friends and foes – as one of the USA’s closest defence allies, Australia was a major victim of Trump’s anti-China moves.

India could be hard hit this time around as he continues a “transactional and mercantilist” approach to trade.

India and Australia should be making the final negotiations on a trade deal a top priority.