U.S.-India ties will be strengthened, but expect tariff hikes

(Source – The Hindu, International Edition – Page No. – 5)

 Strengthening Strategic Ties

• The first Trump administration saw a significant boost in U.S.-India relations, especially in strategic areas.
• S. identified China as a strategic challenge, aligning India’s interests with the U.S. in the Indo-Pacific region.
• The Quad (U.S., India, Japan, Australia) was revived and continues under the Biden administration, laying a strong foundation for future cooperation.
• Further strengthening of defense ties is expected, including more military exercises and foundational agreements.
• The focus will likely remain on countering China’s growing influence in the region.

Trade Relations: Tariffs and Market Access

• President Trump pushed for India to lower tariffs and open up markets, a stance likely to continue in the second term.
• India lost its GSP (Generalized System of Preferences) status under the previous administration, signaling tensions in trade relations.
• The Trump administration may impose tariffs of 10-20% on most countries, including India, to address perceived protectionism.
• Such tariffs could serve as a negotiation tactic to secure better trade terms, particularly in goods and services.
• The trade discussions will likely focus on finding a balance that benefits both nations.

Energy and Economic Policies

• The previous administration’s “maximum pressure” campaign on Iran led India to halt oil imports from Iran, and similar policies are expected in the second term.
• The U.S. may push India to comply with sanctions on other nations, continuing its aggressive foreign policy stance.
• Energy cooperation between the two countries will likely remain a key issue, with discussions about alternatives to Iranian oil and the broader energy market.
• In addition to energy, broader economic cooperation may include technology, services, and other sectors critical to both economies.

Impact of Domestic Legal Issues

• Legal cases involving Indian businesses, such as investigations into entities like Adani, are unlikely to influence the broader diplomatic relationship.
• The Trump administration is expected to refrain from intervening directly in such cases, ensuring these issues do not derail U.S.-India ties.
• While these investigations may be significant domestically, they are not expected to affect foreign policy.

Diplomatic Strategy

• The appointment of the next U.S. ambassador to India will be crucial for managing relations.
• The ambassador must be well-versed in Trump’s diplomatic style to effectively translate Washington’s policies to the Indian government.
• Handling any statements or controversies from the U.S. will be a key role for the new envoy.

Conclusion

• Overall, U.S.-India relations under the second Trump administration are expected to strengthen in defense cooperation, trade negotiations, and energy policies.
• Strategic alignment against China will continue to be a cornerstone, while trade issues will likely require delicate negotiation to ensure mutual benefits.