US Trade Strategy: India's Firmness Secures Key Concessions in Interim Deal
United States President Donald Trump employs tactical coercion to extract concessions from trading partners, but history shows he will compromise when met with unblinking firmness. This trait was vividly demonstrated by the White House when it edited its earlier fact sheet on the interim India-US trade deal within 24 hours, accepting India's concerns on pulses, digital technology, and agriculture.
The revisions included changing the wording from "committed" to "intend" in a critical clause regarding India purchasing US goods and services valued at $500 billion over five years. Leader of Opposition Rahul Gandhi has labeled this target as impossibly high, calling it a "surrender" to the US. However, empirical evidence suggests otherwise, highlighting a significant misreading of the deal's feasibility.
Debunking the $500 Billion Target: A Reality Check
India is already purchasing over $100 billion worth of US goods and services annually. Key contributions to the $500 billion target include:
- Boeing aircraft orders by Indian airlines exceed $80 billion.
- Defence equipment over the next five years, such as SkyGuardian hunter-killer drones and Apache attack helicopters, will add substantial value.
- Crude oil imports from the US at two million barrels daily could contribute over $48 billion annually, based on $65 per barrel.
- Gas and other energy products, including equipment under India's reformed nuclear power legislation, can significantly boost these numbers.
The likelihood of importing up to $150 billion annually, thereby exceeding the $500 billion target, is self-evident. This data underscores that Rahul Gandhi has either not fully understood the empirical evidence or chosen to ignore it deliberately.
US Perspective: India as a Strategic Alternative to China
What Indian Opposition MPs overlook is clear to Americans, including US Trade Representative Jamieson Greer. In a recent television interview, Greer emphasized, "The India-US deal will be a very important one that will reverberate for years to come." He added that India could serve as "an alternative to China for American companies looking to diversify their production."
Greer elaborated on the shift in global supply chains, noting, "We want the supply chains to be here in the US and as close to home as possible. India can be a waystation for that. They have a lot of folks there, and manufacturing capacity. India can be a good source as long as it is balanced and fair."
Industry Confidence: Textile Exporters Remain Upbeat
Rahul Gandhi's views are at odds not only with US trade authorities but also with Indian exporters. For instance, textile exporters assert that conditional tariff exemptions for Bangladesh will not harm Indian exports. Premal H Udani, chairman of Kaytee Corporation, stated, "The exemption for Bangladesh-made garments using US materials is unlikely to provide a major edge due to transportation costs and uncompetitive spinning industries in Dhaka."
A Sakthivel, chairman of the Apparel Export Promotion Council, echoed this optimism, saying, "We have got a good deal from the US. Cotton for re-export can be considered for concessions with 20% value addition." Trade body GTRI added that Bangladesh's limited export structure means the concession will likely result in only a modest increase in garment exports to the US.
Trump's Mercurial Nature: Why Firmness Works
The principal rhetorical error by Rahul Gandhi and MP Shashi Tharoor is failing to acknowledge Trump's mercurial nature. The US president has frequently insulted allies like Canada, Denmark, and the EU, yet with India, he has been notably circumspect and often laudatory, even during tense periods with high tariffs.
In contrast, Trump recently threatened to block a bridge between Detroit and Canada, raging on TruthSocial, "I will not allow this bridge to open until the US is fully compensated... Canada treats the US with the Fairness and Respect we deserve." This highlights that when negotiating with a maverick leader like Trump, firmness and patience are virtues that deliver favorable outcomes for India.
Rahul Gandhi and his acolytes, with their parliamentary theatrics, risk sullying these hard-won gains by misrepresenting the deal's substance and strategic importance.
