New Delhi: US President Donald Trump seems to be doing the unthinkable: forcing India’s hand to lower the high tariffs that have protected its economy since its Independence.
In ‘‘Whatever you charge, I’m charging’: Donald Trump forces India’s hand on tariffs,’
the Financial Times reports that the US’s hard stance on reciprocal tariffs is forcing a broader realignment of New Delhi’s outlook on trade.
This is despite a visit to Washington last week by Commerce Minister Piyush Goyal, who is expected to travel there again shortly. Traditionally seen as a tough negotiator (especially by the EU), India has relaunched its long-running free trade agreement talks with the UK and pledged to complete an FTA with the EU by the end of the year.
“Already, Modi has promised to buy more US oil and gas, though it has closer and cheaper suppliers in the Middle East and Russia. The two countries also agreed to conclude the first tranche of a ‘mutually beneficial, multisector’ bilateral trade agreement by autumn,” John Reed, Andres Schipani and Haohsiang Ko report for FT.
“But India, which has protected its industries fiercely since independence in 1947, has some of the world’s highest average tariffs, and the cost of cutting them will be politically sensitive, particularly in agriculture, where nearly half of Indians work.”
It’s a sticky situation. Since 2014, the Modi government has signed FTAs with Australia, the United Arab Emirates, and the European Free Trade Association. But it has also introduced a slew of tariffs to protect industries like solar equipment and support, part of the Atmanirbhar Bharat push.
But India’s stance towards the US is different—perhaps a reflection of “America’s status as a strategic defence and economic partner”, FT says.
“The US is India’s largest trading partner, with $129bn of mutual trade in 2024, though EU countries collectively account for more. The US’s India trade deficit reached more than $45bn last year — less than half of the ‘almost $100bn’ deficit Trump claimed at the White House, but the 10th largest of America’s trade partners,” the report says.
Whatever the process, “the trade talks promise to be fraught,” FT reports.
The best case scenario is slashing tariffs for industrial goods—but any discussion of agriculture will have to be extremely nuanced because India’s livelihood is at stake.
It’s in this climate, Politico reports, that US Vice President J.D. Vance is expected to arrive in India for his second-ever foreign trip, following his appearance at the Munich Security Conference in February.
“The vice president’s first foreign trip was marked by a fiery speech at the Munich Security Conference where he criticised European governments for their handling of illegal migration, ignoring religious freedoms, and overturning elections. The speech shook allies, who were expecting to hear about proposals to broker a deal between Russia and Ukraine to end the war,” Dasha Burns and Jake Traylor report in ‘Vance to visit India for second foreign trip as VP.’
He’ll be making this trip with Usha Vance, the first time she’s visiting her “ancestral country” as second lady.
It’s unclear what’s on the table for Vance’s visit. But he’s expected to land in New Delhi later this month, perhaps shortly after Director of National Intelligence Tulsi Gabbard’s visit during the Raisina Dialogue.
Either way, it’s a lot of bilateral action in such a short time, bringing up the tally to three visits from India and two upcoming high-profile visits from the US to India.
And let’s not leave out Elon Musk: Starlink has reportedly signed a deal with both Airtel and Reliance Jio to bring its internet services to India. The announcement comes just weeks after Modi and his delegation met Musk and discussed issues “including space, mobility, technology and innovation,” Reuters reports in ‘Musk’s Starlink, India’s Airtel tie up to challenge Ambani in broadband race.’
All this is happening while India’s juggling another hot potato: the language battle.
In ‘Hindi v Tamil: India’s language battle heats up,’ the BBC reports on the National Education Policy (NEP) and the clash over its implementation.
“India, where states are mostly organised on linguistic lines, has nearly two dozen official languages, including Hindi, Tamil and English. But southern states have often protested against efforts by successive federal governments to privilege Hindi over other languages,” the Neyaz Farooquee reports.
Citing the heated parliamentary debate in which Union Education Minister Dharmendra Pradhan accused Tamil Nadu Chief Minister M.K. Stalin of “mischief,” the BBC reports that language is a particularly sensitive subject in India, where “successive federal governments have introduced policies or made announcements that have kept these anxieties simmering”.
“A federal government commission that examined the language policy during 1948-49 acknowledged that the issue’s sentimental nature made it ‘difficult to consider it in a calm and detached manner,’” the article says.
“No other problem has caused greater controversy among educationists and evoked more contradictory views from our witnesses,” the commission said, according to the BBC.
(Edited by Sanya Mathur)