New Delhi: India might want to pause talks with the US, according to the Global Trade Research Initiative (GTRI). The founder, Ajay Srivastava, believes that India should engage with the Trump administration in a way similar to how China and Canada are handling their trade relationships.
Srivastava argues that the US is pressuring India to agree to trade terms that serve American interests. He noted that President Trump and his team often use incorrect statistics to criticize India. “Trump has been publicly disrespectful to India with misleading data. Under these conditions, a fair agreement is not achievable,” he said. Nations like China and Canada have already taken steps against US tariffs, and he suggests India should follow suit.
Recently, Trump claimed that India had agreed to lower tariffs on US imports after his administration highlighted unfair practices. Srivastava countered this assertion, emphasizing that India’s lack of response is puzzling and that the situation is drawing global attention.
US Commerce Secretary Howard Lutnick has urged India to open its agriculture market, insisting it should be part of any trade negotiation with such an important partner. He advocates for a broad trade agreement rather than a piecemeal approach.
However, a report from GTRI warns that a comprehensive trade deal could lead to significant US demands beyond just tariff cuts. These could include changes to government procurement, agricultural subsidies, and intellectual property laws, all of which India has traditionally opposed.
There is also concern about Trump’s history of breaking trade agreements, evident from his actions regarding the US-Mexico-Canada Free Trade Agreement and his tariffs on Canadian and Mexican goods.
As a response, Srivastava suggests India should consider a “Zero-for-Zero” tariff strategy. This would mean India only eliminates tariffs if the US does the same. However, he stresses that sensitive areas like agriculture and automobiles should be protected from such arrangements, citing the importance of the auto sector to India’s economy.
For context, he pointed out that Australia’s car industry suffered after significantly cutting import tariffs. Currently, India’s car exports to the US are modest, and rising US tariffs could have minimal impact on India.
Regarding the agriculture sector, Srivastava argues that opening it up to US imports could jeopardize the livelihoods of over 700 million Indians, compared to fewer than seven million in the US. He believes that even limited concessions could lead to further demands from the US.
Currently, tariffs on US agricultural products entering India are relatively low. For example, almonds are subject to a 5% tariff, while pistachios face a 10% tariff. India’s total agricultural exports to the US amount to about $5 billion, meaning retaliatory tariffs from the US would not significantly harm India. Yet, conceding now could lead to additional pressures in the future.
On the topic of tariffs, Srivastava acknowledges that while India does have high rates on particular items, the US imposes much higher tariffs on products like tobacco. Overall, the tariffs for US goods entering India are only slightly higher than those India faces from the US.
He also pointed out inaccuracies in US claims regarding trade figures, including Trump’s assertion of a $100 billion trade deficit with India when official data shows it to be less than $45 billion. Misrepresentations like stating that India has a 100% tariff on Harley-Davidson motorcycles, when in fact it was reduced to 30%, further complicate discussions.
Srivastava believes it’s crucial for India to address this misinformation, especially when other nations are standing up to US trade policies. He encourages India to focus on sustainable economic strategies rather than short-term concessions. If the US rejects the proposed Zero-for-Zero approach and imposes tariffs, India should consider its response carefully based on trade impact assessments.
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Source linkGTRI, TRUMP ADMINISTRATION, US COMMERCE SECRETARY LUTNICK, GTRI FOUNDER AJAY SRIVASTAVA, INDIA SHOULD WITHDRAW FROM ALL NEGOTIATIONS WITH US; ENGAGE WITH THEM LIKEOTHER COUNTRIES: GTRI
