1 week Ago By Bloomberg Opinion
By Karishma Vaswani When J D Vance touched down in India on Monday, many were wondering what kind of controversy the US vice president might stir during his short visit.Vance met with Prime Minister Narendra Modi as the two nations work toward a bilateral trade deal. Like every other country besides China, New Delhi has been spared the full force of President Donald Trump’s tariffs for 90 days.
But the clock is ticking: Washington is pressing ahead with its trade war and ramping up efforts to isolate Beijing. If an agreement isn’t reached by the end of that timeframe, the US is threatening to increase the 10 per cent tariffs on Indian exports to 26 per cent. Economic coercion is rarely the best way to make friends.
The duties could deal a $33-billion blow to the South Asian nation’s export market to the US, translating into an almost 1 per cent loss in gross domestic product. This would aggravate an already slowing economy, just as Modi faces scrutiny over job creation, a vulnerability opposition parties would be happy to highlight. .
Pride, anticipation envelope US Second Lady Usha Vance’s native village in Andhra Pradesh.For Vance, this is an opportunity to soften a global image as Trump’s attack dog. It is his first visit to India since taking office.
He made his debut on the world stage in France and Germany in February when he shocked allies by saying that the biggest threat to their security was “from within,” rather than China and Russia. He’s also triggered outrage in Asia, calling Chinese people “peasants” in criticisms about economic engagement with Beijing. In response, officials in the world’s second-largest economy branded him as “impolite.
”That reputation may not go down well in India, a country that views itself as a rising power in its own right, and doesn’t want to be viewed as a junior partner or lapdog of the West. One area of common ground, superficial as it may be, is immediately visible. Vance’s wife Usha — the daughter of Indian immigrants from the southern state of Andhra Pradesh — is accompanying him.
Local media described Vance as “India’s son-in-law” and his visit “a homecoming of sorts.” But what role, if any, Usha Vance will play to smooth ties between the two nations is unclear. Right now, Modi has little choice but to comply with Trump’s demands.
The president has in the past labelled India a “tariff king,” a moniker that isn’t entirely undeserved. The country has some of the highest trade barriers in Asia, although the Indian leader attempted to address those during a recent trip to Washington. He has lowered tariffs on some American goods, promised to crack down on illegal immigration, and proposed plans to buy more energy and equipment.
Currently, Russia is the main supplier of both to India, and the US has long been eager to edge out Moscow.For his part, Trump wants to take advantage of his strong working relationship with Modi to reach a deal that will advance his America First agenda, while New Delhi will hope to be an equal partner, not simply a convenient one. Still, India may also be negotiating from a potential position of strength.
It’s increasingly being viewed as an alternative to Chinese manufacturing, despite legitimate concerns over bureaucracy, corruption, and creaking infrastructure. The country is also a vital player in the geopolitical competition between Washington and Beijing..
In a subtle rebuff to China, Modi, Vance welcome 'significant progress' in negotiations for India-US trade deal . Trump appears to be trying to box Beijing in, but the best way would be to get allies on board. Consistent foreign and economic policy would help: Trade between the two nations surpassed $190 billion in 2023, making the US India’s largest trading partner, overtaking China.
They have also set an ambitious target of more than doubling their trade to $500 billion by 2030. Vance’s visit opens up a host of new ways to bring more predictability to a relationship that has often been volatile. A formal trade deal will help, but India would also like to see some willingness to give more access to citizens and companies to the US market.
Historically, this has been a key priority, but it’s also politically sensitive for Trump. On defense, there are a number of good options. The White House could accelerate approvals and licensing to trusted allies and partners like New Delhi.
India could reprioritize the focus of its $78 billion defense budget and buy more American weapons and technology. This would help cement the argument that like-minded countries are working together to act as a buffer in the competition against China in the Indo-Pacific. India is open to cooperation, but not always on someone else’s terms.
Vance would be wise to mind his manners while he’s there..
