The theme of India-US relations has been a much-observed and commented-upon subject. Still, going by the traditional understanding and comprehension of the bilateral relationship, it has developed over the years as a partnership with the Americans earlier on persuading New Delhi to reach “Allyhood” between the two countries. The moral value-based relationship between New Delhi and Washington rested primarily on the pillars of democracy, human rights, rule of law, and constitutionalism as far as the foundational elements of the partnership are concerned.
 
But the recent tariff strike of President Donald Trump has shaken the roots of economic diplomacy and has made the path of New Delhi much more difficult to tread in a world which is much stymied by regional conflicts. The larger outcome of the cooperative strivings in the trade talks is that the White House and the Raisina Hill have aimed to reach a figure of 500 billion dollars by 2030 as far as the trade quantum of both the countries is concerned, and the Indian diaspora also plays a key role in bridging the differences between the two countries as the Indian brand ambassadors. 

India is striving to seal bilateral trade deals in the form of a bilateral trade treaty, and one such has been inked this with the UK. The prime ministers of these two nations, Narendra Modi and Keir Starmer, have announced it as being partial in nature, but it was a deal that New Delhi had been coaxing and persuading the US for a long time. As the foundational agreements of the order of COMCASA, BECA and other new intelligence agreements have been signed between the US and India, new strides have already been made in the sphere of the strategic partnership between the two sides. 

Trade and investments in the present times form a steady backbone of any bilateral partnership; so, India need this crucial accord despite the US slapping hefty tariffs on New Delhi.

But recently, India has taken a strong stand as high tariffs have been planned by New Delhi on US imports, especially on steel and aluminum. The US Trade Representative terms the American tariffs as “safeguard measures”. It so happened that America had slapped 25% and 10% ad valorem tariffs on Indian exports such as steel and aluminum in February. The fundamentals of the proposed trade deal between India and the US are not crystal clear right now – The deal is yet to be signed! But commerce secretary Rajesh Agarwal has gone on to contend that “India is on the verge of integrating with the key markets of the international system. India has already entered into a bilateral treaty with the UK and the advanced phase of negotiating a trade deal with the European Union is also on the anvil.” 

Thus, a sincere, symbiotic and mutually conducive trade deal is in the offing with America. India has already inked 14 trade deals involving 26 countries. New Delhi thus hopes to enter into a similar, FTA kind of economic and trade agreement with the US, notwithstanding the barrage of tariffs, which will again be functional from August.

The US wants to export genetically modified (GM) crops and cattle feed to the Indian market while India clamours for entry into the workforce-driven sectors, especially in the electronics and textiles-led industry in the US. This time, despite President Trump declaring that India and the US are near to inking a deal, he has imposed a new slew of tariffs on 14 countries, such as Myanmar and Bangladesh. The India-US trade deal is being described as a “mini deal” that can solve the mega themes and bottlenecks between both countries. Bottlenecks remain in the context of the dairy and agriculture sectors, but still, both sides have agreed tentatively to ink a deal and agree over a litany of issues where disagreements and divergences do not amount to major differences.

The US moves ahead with the general blanket assumption that Indian moves to augment duties on American imports are a kind of diabolical defiance and opposition to the MAGA design of the American establishment. Also, as an attendant fact, if one browses through the contextualized issues in the trade deal then the mini deal as it has been marketed might not protect New Delhi from the tariffs and the blatantly transactional approach as a painful and forceful instrument of American foreign policy. 

High differences remain between the two democracies in the realms of data localization and intellectual property rights. The total quantum of the trade between India and the US amounts to a healthy figure of 118 billion dollars, with the US being the largest trade partner of New Delhi. 

Also, on a related note, it’s a proud fact that both countries bask in the terminology of being a “Global Strategic partnership” and the PHD Chamber of Commerce and Industry has estimated the quantum of trade to reach a healthy figure of 300 billion dollars by 2027. Thus, tariffs might be the rankling elements, but all is not dark and pessimistic concerning the India-US trade deal. So far, so good in a Trump-induced volatility.    

Dr. Manan Dwivedi is Faculty, IR and IO, IIPA.
Dr. Gayettri Dixit is Assistant Professor, Centre for African Studies, School of International Studies, JNU.