Donald Trump and India

Amitava Mukherjee

(Amitava Mukherjee is a senior journalist and commentator. He can be reached at amitavamukherjee253@gmail.com)

Donald Trump, the American President, must be aware of the fact that in spite of the Narendra Modi-led government’s proclivity to lean towards the US in matters of international diplomacy, there are genuine hiccups in Indo-US relations which he might find difficult to surmount during his forthcoming visit to India. In fact, he has already dropped a hint to it by painting a negative picture of bilateral economic relations. True to his nature, he will begin his tour by participating in a triviality like inauguration of a cricket stadium in Ahmedabad. But more contentious issues like Indo-US economic relations and the renewed US- Taliban peace talks will come up during negotiations. Much will depend on how the two sides handle these vital issues.

Still, there is no indication that Zalmay Khalilzad, the US special envoy on Afghan affairs, has carried forward his negotiations with the Taliban with any amount of dexterity or finesse. Even when negotiations were going on, the Taliban staged numerous suicidal attacks killing not only Afghan security personnel and civilians but one American soldier also. So India has reasons to doubt America’s ability to usher in peace in South Asia or thwart Pakistan’s attempt to gain strategic depth in Kabul. In the backdrop of the US failure to stabilize the Afghan situation, New Delhi is expected to move with a certain amount of reservations so far as negotiations over security-related issues are concerned. But this reservation is not likely to affect ‘business’ over armaments as Washington has already sanctioned the sale of an anti-missile shield system to New Delhi at a price of US $ 1.86 billion. Moreover, India has already purchased Chinook and Apache helicopters from America for its army and talks are going on over the purchase of Seahawk helicopters for the Indian Navy. But so long, apart from the Chinook and Apache, whatever India has purchased from the US do not belong to core manufactures and are mainly restricted to maritime transport planes cargo jets etc. Just pit them against New Delhi’s acquisition of the S-400 air defence system from Russia, rated as the most lethal anti-missile shield which has transformed the balance of the war in the Middle East in favour of Syria and the purchases from the US would look comparatively insignificant.

But Donald Trump is a practical man. He knows that with its long tradition of an independent foreign policy India is not a very easy customer. That is why the US President has expressed that he is saving the big deal (meaning a comprehensive trade agreement) with India for later but does not know whether it will be accomplished before the coming US presidential election. Trump has quite a few reasons for casting his covetous eyes on the expanding Indian market in spite of the fact that India counts only 3 per cent of the US global trade but enjoys a massive trade surplus. The first is no doubt the ongoing US-China trade war.Both sides are losing markets and revenues and the US President now wants to make up a part of it through expansion of trade with India on his own terms. But he cannot press the issue hard with New Delhi because India is now very important for the US in the latter’s Asia Pacific strategic initiative.

But there is a steady campaign among American policymakers and think tanks against the favourable balance of trade that New Delhi enjoys. America is now India’s second-highest export market (16 per cent) after the European Union (17.8 per cent). But India’s import figures indicate that Trump has a genuine cause of apprehension. India imports the highest amount of its goods and services from China (14.6 per cent) followed by the EU (10.2 per cent) and the US (6.3 per cent). It will be watched with interest whether the American President can persuade New Delhi to cut down on its imports from China in the wake of the Coronavirus scare and instead increase its share of imports from the US.

Trump is under pressure particularly from three lobbies of his country- those manufacturing medical equipments, the dairy sector and the agriculture lobby. He is likely to press for withdrawal of price controls which the Modi government has imposed on imported medical equipment. The US President will try to see to it that the medical lobby of his country can reap maximum profit for India even if it means high medical expenses for the common people of India. There is likely to be a logjam on this point because acceding to Trump’s pressure will mean a severe blow to Narendra Modi’s Ayushman Bharat programme.

But India will have to find a way to lessen its trade surplus. It should also keep in mind the fact that by allowing the bilateral trade to grow from a 16 billion dollar mark in 1999 to 142 billion dollars in 2018 and at the same time willfully granting trade surplus to New Delhi, the US has done India a great favour. India is still enjoying a favourable balance of trade amounting to more than US $ 23 billion. So far as agricultural and dairy products are concerned India exports to the US goods worth US$ 2.7 billion and imports from that country items worth US$ 1.5 billion only. But Donald Trump should have been more considerate before excluding India from the Generalized System of Preference (GSP) list which allows developing countries an advantage of non-reciprocal, duty-free entry of goods into America.

But Modi is also under pressure from the Swadeshi Jagaran Mancha (SJM), an arm of the RSS. Under pressure from the SJM the Indian government has slapped taxes on various e-commerce platforms like the Amazon and the Walmart owned Flipkart. Apples, a principal export item of the Washington state of the US, are facing tariff barriers in India. Similar is the situation with Almonds, Walnuts and Cheeses of California. Tariffs on US-made mobile handsets have been enhanced from 0 per cent to 20 per cent. In retaliation of such tariff barriers to US-made goods and commodities in different countries and to iron out the unfavourable balance of trade Donald Trump has also imposed 25 per cent import duties on steel and 20 per cent on aluminium.

On the eve of his visit to New Delhi Donald Trump has rued that ‘India has not treated America fairly’. But optimism, and not pessimism, should be the guiding principle of international diplomacy in spite of the fact that American postures have not been friendly towards India always. However, leaving the past behind, India and the United States should try to remain close to each other with the goal of ushering instability in South Asia.