Editorial

India needs to rework its US strategy

| Updated on May 08, 2019 Published on May 08, 2019

File photo of US President Donald Trump and Prime Minister Narendra Modi   -  REUTERS

Thanks to Trump administration’s hardline stance on trade and Iran sanctions

We’ve come a long way from when Prime Minister Narendra Modi arrived at the White House and bear-hugged President Donald Trump. Since then, India-US relations have had highs and lows. On the strategic front, it’s unquestionable the Americans worked the phones after Balakot and campaigned to have Masood Azhar declared an international terrorist, much to Pakistan’s chagrin. But India has been one of the worst hit by Washington’s Iranian oil sanctions. US Commerce Secretary Wilbur Ross also struck an acrimonious note in Delhi when he said India would be breaking WTO rules if it retaliated against withdrawal of trade privileges giving 3,000 Indian goods duty-free US access. Ross didn’t mince words as he listed various India and US trade-conflict areas. “Any time a government makes a decision adverse to another, you will have to anticipate there could be consequences,” he said, though he’s indicated the Generalised System of Preferences scheme might be preserved until a new government is in place.

It’s been clear for some time that the initial Trump-Modi display of bonhomie hid a harsher reality. Trump frequently harped on Indian taxes on Harley-Davidson motorcycles. He wasn’t in the least mollified even after India cut duties to 50 per cent. Motorcycles are, of course, a tiny irritant in the India-US trade basket. Two US giants, Walmart and Amazon, have been hit by India’s sudden decision to alter e-commerce rules relating to online sales of products. Washington is also battling India’s data localisation drive. Ross cited Mastercard’s issues and argued India’s stand is discriminatory. India’s new price controls on medical devices like stents have riled the US as well and some companies consequently aren’t bringing their latest models to this country. Also, the US is pushing India to relax food import policies and Trump’s even raised the issue of taxes on American whiskey. In fact, he’s been clear he won’t be satisfied till India’s US trade surplus is eliminated.

Still, move to a strategic level and the India-US relationship looks less grim. The Americans weren’t happy when India tested its anti-satellite missile in March but kept criticism muted. Also, after Pulwama, US National Security Advisor John Bolton made it clear where Washington’s sympathies lay when he called his Indian counterpart and even asserted India’s right to self-defence. The US’s also said to have played a behind-the-scenes role to get Pakistan’s swift release of Wing Commander Abhinandan Varthaman. During his India trip, Ross made it clear India-US relations could benefit immensely if India buys US weapons. But if truth be told, US disagreements with India are relatively small beer compared to fights Washington has picked with China and allies like the EU. Importantly, what Ross’s visit has underlined though is that as India becomes an ever more key global economic player, it can’t afford to arbitrarily chop and change its financial and commercial rules. Clearly, India needs a Trump strategy.

Published on May 08, 2019
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