US President Donald Trump and Indian Prime Minister Narendra Modi “Hody, Modi!” At NRG Stadium in Houston, Texas, 22 September 2019.
Saul Loaib | AFP | Getty images
The pressure on India to seal a trade deal with the US has intensified this week before the time limit of August 1, with the increase in tariffs will be 26%.
A trade deal between the US and Japan announced on Wednesday, which addressed the points glued to the more and more market access to American auto and agricultural products, also added urgency to New Delhi.
Like Japan, India has opposed more market access to US agricultural products to protect its local farmers, which create a large -scale voting blocks. recently Trade deal with UKFinally on Thursday, India succeeded in protecting its most sensitive agricultural territories from tariff concessions.
Actually, India’s Commerce and Industry Minister Piyush Goyal admitted that This area was sensitive to India In an interview with CNBC on Thursday.
“We are always very sensitive to the interests of our farmers, our (subtle, small and medium enterprises), and will ensure that our areas of anxiety are well preserved,” Goyal said.
However, as a window to seal a trade deal with the US closure, analysts say that Washington has its own reasons to finalize an agreement soon.
Harsh V, Vice President of Studies and Foreign Policy at Observer Research Foundation. Pant said, “Strategically, America is very less interested in separating India. It sees India as a strong partner who can shape Indo-Pacific landscape.”
Strategic hedge against China
Particularly bringing the manufacturing back states from China has been a central principle of Trump’s economic policy. By that end, India represents a possible option for China in global manufacturing, analysts reported to CNBC.
Because the Trump administration is largely focused on combating China’s arrival on the global platform, it is very important, “very important,” Pant said.
As the US puts itself in position against China’s access to “global supply chains,” manufacturing in India becomes a natural “agreement”, and can even complement back changes in America, “Vishnu Varthan, head of economics and strategy at Mizuho Bank, said.
For example, the US may control some high end of the manufacturing chain, which requires more technology and efficient labor, while India “complements it with cheap labor,” Varthan said.
In doing so, India may be able to cut China and keep the US in more strategically, “said Varthan, following all diplomatic tests.
BRICS Titrop
Pants of the Observer Research Foundation said that India’s role in BRICS is a group of 10 emerging economies, including Brazil, Russia, India, China and South Africa, can also give New Delhi a degree of flexibility in “US-India deals”.
As Carnegie settlement for international peaceThe block aims to challenge the global economic institutions with Western-Left and reduce US dollar dominance in the global economy.
On July 6, US President Donald Trump Additional 10% tariff threatened On countries that align with “anti-American policies of BRICS”, such as Indian Prime Minister Narendra Modi on a high-profile visit to Brazil for the BRICS Summit.
Will be trump Repeat her danger After a week, on 18 July, saying that he would hit “very, very hard” hits (BRICS) “if they ever” are a really meaningful way. “He said,” We can never let anyone play games with us. “
However, despite being caught in a tug-off-war between the US and the BRICS, India has appeared to avoid Trump’s anger. Actually, Trump indicated On many occasions The outline for a trade deal with India is close to the finishing line.
Within BRICS, India is facing increasing pressure from China, which, according to Mizuho Bank’s Varthan, sees New Delhi as “competition for a leadership role” in the block. As such, it appears that India will be useful for America as an imbalance towards China in BRICS.
Trump has also claimed that BRICS wants “dollars” through the construction of an alternative reserved currency, despite refusal of members of the BLOC.
This may be another bargaining chip in India’s interaction arsenal with America, because India said, “India” can work to convince Trump that he is not on the board with an alternative currency plan. “
He said that India can focus on what it can offer to the US to offer transactions, which can “encourage Trump to behave a little better because he sees them as alignment.”
India’s plan B
India is emphasizing for more trade deals, even it continues to interact with the US Sarang Shergor, director of the Global South Program at the Quinshi Institute, said in the email comments that it is part of India’s “Multiplication Strategy”.
In addition to the UK, India has interacted on trade agreements with the Maldives, the European Union, and more, while “while maintaining its strong link as its greatest global partner with Washington,” according to Shhidor.
This diversification takes advantage of India, both on the table of negotiations and to navigate the global economic shock. If the US imposes high tariffs or trade with more difficult concessions, India can accelerate deals elsewhere, which can soften the shock.
More than just a hedging strategy, Shidor feels that this approach reflects India’s broad world vision: as a growing power, which is the purpose for multilateralism while “championing global South”.
