Impact of US's Tariffs on India
India, despite initial engagement efforts with the current US president, faces significant political and economic challenges due to the US's additional 25% tariff, increasing the total to 50% on goods. This move has political implications and is meant to impact India adversely.
India's Initial Engagement with US
- Presented a forward-looking trade package to American negotiators, learning from the withdrawal of the Generalized System of Preferences (GSP).
- Geopolitical stances included welcoming the end of the Ukraine conflict and supporting tariffs on China.
Challenges in India-US Relations
- The relationship has changed, moving from shared values to punitive measures at the leadership level.
- India has been blamed for allegedly funding Russia’s war effort and labeled the “tariff king.”
- The US's current stance is seen as a geopolitical misstep, affecting long-standing ties and raising questions about strategic autonomy.
Broader Geopolitical Concerns
- Uncertainty over US foreign policy, including potential US-China or US-Russia agreements, strengthens India's geopolitical hedging.
- Pakistan's engagement with the US despite its backing of terrorism in India adds to India’s concerns.
Domestic and International Pressure Points
- Issues include India’s stance on high-value defense platforms, agricultural and dairy import negotiations, and immigration practices.
- The tariffs threaten to outprice Indian goods and services in the US market, possibly unraveling decades of connectivity.
India's Strategic Response
- India should remain calm, avoid escalating tensions, and focus on internal reforms and rebalancing.
- The India-US relationship is critical and has survived past differences; open dialogue should continue to find common ground.
In conclusion, while the current period is marked by volatility in the India-US relationship, the importance of maintaining a constructive dialogue and pursuing internal resilience remains paramount.