2024-11-07 11:26:00
During his first term as president from 2017 to 2021, Trump warred with the South Asian nation over tariffs but shared a healthy relationship with Prime Minister Narendra Modi.
Closer to the end of his time in the White House, India and the United States agreed to negotiate a limited accord, in an effort to bridge their differences.
“India is open to lowering tariffs for entry of U.S. companies if that means better trade terms for Indian goods,” said one of the sources aware of the government’s thinking, who spoke on condition of anonymity.
The South Asian nation could lower import tariffs in sectors such as automobiles, the source added. “We had a fairly good convergence during his first term in office,” said Harsh Vardhan Shringla, who was India’s ambassador to Washington during Trump’s first term. “I think his second term will be even better because the two sides have developed a certain amount of mutual understanding and respect, especially at the level of the leaders.”
India had almost concluded a mini trade deal during Trump’s first term but for the COVID-19 pandemic, the retired diplomat added. “So, there is a scope to conclude a free trade agreement under Trump II.”
New Delhi is not too worried about the fate of its trade ties with Washington in Trump’s coming term, the sources said, with China largely front and centre for his tariff threats.
Trump’s approach to trade matters is transactional, which New Delhi believes helps in talks, another source, who is a senior government official, said days before Trump won the election.
India’s external affairs and trade ministries did not immediately reply to mails seeking comment.
STEADY PROGRESS
Modi, who flaunts warm ties with Trump, was of one the first world leaders to speak to him by telephone after his historic win. Despite criticising India on trade, Trump called Modi “fantastic” during his campaign.
The Indian leader also had good relations with Democratic presidents such as Barack Obama and Joe Biden.
The White House rolled out the red carpet for him last year, touting deals on defence and commerce as Washington increasingly views New Delhi as a counterweight to China’s growing regional influence.
Regardless of who occupies the White House, trade ties between the two nations have grown steadily over the last decade.
The United States is India’s top export destination, with goods and services exports of $120 billion in 2023.
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**Interview with Harsh Vardhan Shringla, Former Indian Ambassador to the U.S.**
**Interviewer:** Thank you for joining us today, Mr. Shringla. Let’s dive right into the current economic climate with Trump’s potential second term on the horizon. How do you foresee U.S.-India trade relations evolving if President-elect Trump follows through on his campaign promises regarding tariffs?
**Shringla:** Thank you for having me. I believe there’s a significant opportunity for both nations to enhance their trade relations. India is indeed open to offering easier market access to U.S. firms as long as there is reciprocal action from Washington. Lowering tariffs on imports, especially in key sectors like automobiles, could pave the way for a more robust trade environment.
**Interviewer:** During Trump’s first term, we witnessed some tensions regarding tariffs. Given that, what do you believe has changed in the dynamic that might lead to a more favorable relationship this time?
**Shringla:** The previous administration cultivated a certain level of mutual understanding and respect between leaders. The groundwork for collaboration was established, culminating in near negotiations for a mini trade deal that ultimately fell through due to the pandemic. I think that experience has created a foundation we can build upon, potentially leading to a more substantive trade agreement in the future.
**Interviewer:** What are the primary concerns for India amidst these discussions of potential tariff adjustments, especially with the backdrop of capital outflows and weak corporate earnings?
**Shringla:** Those concerns are valid. India is currently facing challenges, such as capital outflows and weakening domestic earnings, exacerbated by rising U.S. Treasury yields affecting global markets. However, the prospect of better trade terms could stimulate economic growth and bring stability. Lower tariffs could help Indian goods gain a stronger foothold in the U.S. market, which may ultimately mitigate some of these concerns.
**Interviewer:** In your view, how critical is the relationship between the two nations for India’s economic strategy moving forward?
**Shringla:** That relationship is vitally important. A strong U.S.-India trade partnership can drive mutual economic growth and create jobs in both countries. It’s a strategic priority for India to engage with major economies like the U.S. to enhance market access and ensure a conducive environment for investment.
**Interviewer:** Thank you, Mr. Shringla, for sharing your insights. It seems there is a cautious optimism about what’s ahead for U.S.-India trade relations under a second Trump administration.
**Shringla:** Thank you for having me. Yes, cautious optimism might be the right phrase. It will be crucial for both sides to engage constructively in the months ahead.
