Key points
- Areas of compromise include trade, dollar, migration
- India has much to lose: experts
- US trade deficit with India high
ISLAMABAD: As leaders around the world try to head off potential economic disaster scenarios likely to stem from US President Donald Trump’s tariff war, Indian Prime Minister Narendra Modi appears to toe the line with quick concessions on issues core to Trump’s agenda.
In a matter of weeks, Indian Prime Minister Narendra Modi has delivered a rapid series of concessions to the White House, according to the Financial Post.
The concessions provide a peek into how New Delhi plans to deal with the new US president as he twists the arms of friends and foes alike.
India’s latest accommodation came on Saturday when Modi’s government unveiled the first-ever overhaul of its tariff regime, which included sweeping cuts to duties on imports from textiles to motorcycles. It follows New Delhi’s pledge to accept thousands of unlawful migrants from the US and maintain the US dollar as its trading currency, the Financial Post said.
Conciliatory mood
The measures also reflect the conciliatory mood that has taken hold in India as Trump’s second term gets under way.
India’s stance was seen to be harder during Trump’s first term.
Indian officials, speaking on condition of anonymity, to Financial Post that they were eager to preserve deepening ties in trade, defence and technology-sharing between the two nations.
They were also reportedly eager to bolster India’s status as a destination for foreign manufacturers leaving China.
More to gain than lose
New Delhi has more to gain than lose by maintaining friendly ties with Trump, they said.
“India is quite central to the US in every way, whether it’s the Indo-Pacific strategy as well as where to tell companies to go to avoid tariffs,” said Alicia Garcia-Herrero, chief economist for Asia-Pacific at Natixis.
“The risk of major tariffs on India is low, but it seems they’re doing everything they can to avoid tariffs.”
India is quite central to the US in every way, whether it’s the Indo-Pacific strategy as well as where to tell companies to go to avoid tariffs.” – Chief economist for Asia-Pacific at Natixis Alicia Garcia-Herrero
Global race
Governments around the world are racing to get ahead of protectionist moves by the US as Trump follows through with new tariffs on Canada, Mexico and China — raising new threats to global growth and roiling global markets.
Already, South Korea has said it is considering buying more US food and energy, while Japan has said it is seeking stable energy supplies from Washington.
