India Pursues Stronger U.S. Relations Amid Tariff Tensions Under Trump 2.0

India aims to strengthen ties with the U.S. as Trump’s tariff threats persist. Historical trade disputes have raised tensions, with recent statistics showing India’s significant trade reliance on the U.S. Trump’s potential return could pressure India to adjust trade barriers, yet there are opportunities if tariffs on China increase. Despite challenges, strategic cooperation remains a focal point.

India is looking to strengthen its ties with the United States as former President Donald Trump potentially enters a second term. Trump’s threats to impose reciprocal tariffs on countries like India have heightened tensions, as he previously labeled India as the “tariff king” due to high import duties on American goods. Despite India reducing these tariffs, Trump expressed dissatisfaction, indicating ongoing friction in trade relations.

Historically, the U.S.-India trade relationship has encountered several challenges, particularly during Trump’s first presidency. In 2019, India retaliated against U.S. tariffs on steel and aluminum by imposing its own tariffs. This led to the U.S. revoking India’s preferential trade treatment under the Generalized System of Preferences, adversely affecting Indian exports. In the fiscal year 2023-24, India recorded significant trade figures, exporting $77.52 billion worth of goods to the U.S., while imports stood at $42.2 billion.

Under a potential Trump 2.0 administration, India is expected to navigate both challenges and opportunities. A U.S.-centric trade policy could pressure India to lower its trade barriers, impacting the competitiveness of Indian goods. However, if Trump raises tariffs on Chinese imports, Indian exporters may benefit from the demand shift as U.S. companies seek alternatives. This dynamic was observed during Trump’s trade war with China, where Indian exporters experienced increased opportunities.

Despite tariff tensions, India’s strategic relationship with the U.S. has grown stronger, particularly in defense and geopolitical matters. High-profile events such as “Howdy Modi” in Houston and “Namaste Trump” in India highlighted a strong camaraderie. With both leaders sharing concerns regarding China’s influence, there exists a potential for strategic alignment that may mitigate some trade challenges as Trump seeks a return to the White House.

In summary, India appears poised to enhance its relationship with the United States under a potential Trump 2.0 administration. Despite historical trade tensions characterized by tariffs, there are both challenges and opportunities ahead. Strengthening strategic ties could serve as a buffer against trade impacts, particularly within the context of growing concerns regarding China’s influence.

Original Source: m.economictimes.com