Editorial 2 : Despite Tariffs
Context: 100 days of Trump Presidency and India-US relations
Diplomatic Engagements
- PM Modi’s US Visit (February, 2025)
- Objective: To mitigate potential trade conflicts and solidify bilateral ties.
- PM Modi prioritized an early visit to establish rapport with Trump.
- Pre-visit groundwork by External Affairs Minister S. Jaishankar.
- Focus on addressing Trump’s concerns over tariffs and trade imbalances.
- High-Level US Visits to India
- Director of National Intelligence Tulsi Gabbard (March 2025)
- Discussed intelligence-sharing and counterterrorism cooperation.
- Gabbard delivered a speech at the Raisina Dialogue, emphasizing bipartisan US support for India.
- Vice-President J.D. Vance (April 2025)
- Combined personal heritage ties (Indian-American spouse) with professional diplomacy.
- Highlighted trade and defence collaboration goals.
Trade and Tariffs
- India’s Proactive Concessions
- India has reduced tariffs on American products (e.g. Harley-Davidson motorcycles).
- There is a tentative offer to purchase F-35 fighter jets.
- US Tariff Actions
- April 2 Tariff Imposition: US imposed 27% tariff on India.
- Temporary Reprieve: Tariffs paused for 90 days (until July 2025) due to global backlash.
- Ongoing Negotiations
- India is negotiating a trade pact to avoid post-moratorium tariffs.
- India’s strategy: Avoid direct confrontation with Trump’s bully negotiation style.
Defence Cooperation
- F-35 Fighter Jet Proposal: Discussed during PM Modi’s US visit. Acquisition would modernize India’s Air Force but strain budgets.
- Vance’s Defence Push: Urged India to increase purchases of US defence equipment.
- Strategic Implications
- Strengthens US-India defence ties as a counterbalance to China.
- Aligns with India’s diversification away from Russian arms.
US Immigration Policy: Deportation of Indian Immigrants
- India accepted deportees despite reports of harsh treatment like shackling during flights.
- PM Modi’s silence on the issue reflects a pragmatic approach to avoid tensions.
Counterterrorism Collaboration
- Kashmir Terrorist Attack (April 2025)
- Brutal attack on Indian tourists by Pakistan-linked Resistance Front while JD Vance was in India.
- US unequivocally condemned the attack.
- Intelligence Sharing: Highlighted as a pillar of bilateral cooperation during Gabbard’s visit.
Challenges and Risks
- Trade Tensions
- Tariff Uncertainty: A 27% tariff threat looms post-July 2025.
- Economic Strain: F-35 purchase and tariff concessions could strain India’s fiscal resources.
- Domestic Criticism
- Opposition concerns over human rights of deported immigrants.
- Balancing nationalist rhetoric with pragmatic diplomacy.
- Geopolitical Pressures: Managing relations with traditional partners like Russia while deepening US ties.
Conclusion: Bipartisan US support for India persists despite Trump’s transactional style. Tariff negotiations will determine the trajectory of bilateral relations. Long-term success hinges on resolving trade disputes and maintaining strategic alignment.