Tuesday, 9 August, 2022
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Modi can’t forget trade war with US just because Trump called him a ‘great friend’ at G-20

Both Jaishankar and Pompeo are confident India & US can tide over thorny issues but Trump’s been angry over Modi govt’s retaliatory tariff.

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US President Donald Trump’s remark that he and Prime Minister Narendra Modi ‘have become great friends’ builds on Secretary of State Mike Pompeo’s assertion that “only Modi-Trump can make India-US relationship work”. The two leaders’ bilateral meeting in Osaka, Japan, for the G-20 summit can inspire only so much hope given Trump’s outburst at India’s move to hike tariff on imports just hours before the meeting with Modi.

The United States has shown considerable keenness in recruiting India as an important partner in high-tech military hardware, restricted so far only to NATO allies. The seriousness of the change in the US’ attitude can be gauged by the fact that two US Congress members – Democrat Mark Warner, and Republican John Cornyn – have moved a resolution in the US Senate to amend the Arms Control Export Act. It is significant that both the US political parties are united in their approach towards including India as a business destination for military hardware, especially F-16 fighter aircraft.

Also read: Modi & Trump discuss global issues like Iran, 5G, trade ahead of G-20 meet

India-US defence ties

While it is important for New Delhi to strengthen the process of upgrading its military power, it is equally important to avoid getting trapped into the ensuing arms race in the region. Our conventional security threats emerge from our Western neighbour, which has become the epicentre of global terrorism.

Like the Obama administration, Trump too has a serious compulsion to withdraw from war-torn Afghanistan, leaving the place to NATO allies and India-China-Pakistan axis. This axis is highly untenable given the inherent contradictions in the respective approach of these countries and severe clash of national self-interests.

The immediate concern for New Delhi should be to acquire cutting edge military technology, increase its firepower in its fight against terrorism, fine-tune intelligence input mechanism, and, above all, allocate budget for strengthening and capacity building of the Indian Air Force (IAF).

After signing a US$ 500 million deal with Israel in 2016 for 8,000 Spike ATG missiles and 300 launchers (from the country’s government-owned Rafael Advanced Defense Systems over a rival US offer of Javelin missiles that Washington had lobbied hard to win), India scrapped the deal in 2017.

But the import of the S-400 from Russia will fit our agenda. How best India can defend its right to deal with Russia against the wishes of the US will determine the seriousness of Trump’s moves of cooperation with India.

Besides this weaponisation programme, the Modi government has to devote more time and energy to strengthen indigenisation of defence production and Modi’s Make in India project, which has yet to script its success story. The Defence Research and Development Organisation (DRDO) had successfully carried out last year the maiden flight of its indigenous drone programme, Rustom-2, which requires more attention for its induction into the Indian Army as soon as possible.

Also read: As Trump & Modi govts tussle over trade, a look at what India imports from where

Don’t lose sight of trade

The real issue for India is to take the defence partnership with the US to the next level without getting drawn into the NATO or arms race orbit. Also, New Delhi’s prime concern should be to increase trade with the US, its largest trading partner.

Foreign Minister S. Jaishankar, a former bureaucrat, has exuded confidence that both India and the US will be able to negotiate their ways through trade differences and sort out the thorny issues.

Issues like reciprocal tariffs, proposed restrictive laws on e-commerce and online marketing, restrictions on market approach and data localisation will need greater understanding and time to resolve. India cannot be seen only as a market and seller’s paradise. Its business interests were seriously jeopardised when China emerged as the manufacturing hub of the world.

Capitalist China under the Communist billboard practically catapulted Beijing to the centre stage of geopolitics. The incredible but carefully planned rise of China rang alarm bells in many world capitals. Economies of many Asian countries and even some of the European markets were recalibrated to align with the Chinese economy. Rising clout of China also propelled the issue of serious security threat to Asian and Indo Pacific powers practically forcing them to form newer power blocks like the QUAD.

Protecting indigenous manufacturing, trade and business interests, and security concerns have become part of national narrative in democracies all over the world. India and the US are no exception.

Trump’s rise after his successful 2016 presidential election campaign and Modi’s first term following his victory in the 2014 Lok Sabha election had many similarities, the most prominent being the emphasis on America First and Make in India. Manufacturing in the US economy was practically outsourced to China and the Indian markets were flooded with made in China products. In both countries, job loss and unemployment became real-time issues.

Also read: On trade tariff, India & US need to place strategy over economy keeping domestic politics out

Trump has since hit the reset button and virtually embarked on a ‘punish China’ economic policy, resulting in a trade war. His trade missiles have hit India equally hard, prompting New Delhi to retaliate through high tariff on import of 29 US products.

Yet, these trade barbs notwithstanding, India needs to earnestly work to improve its manufacturing platforms to divert the business from China. It is easier said than done.

While India and the US can counter trade and security concerns, New Delhi would have an additional worry of insulating its national economy from another round of unbridled foreign trade and goods flooding the markets to the detriment of its indigenous industry.

The US needs India’s support to maintain its global pre-eminence status and safeguard its strategic interests. India as an emerging economy requires the US support but without compromising with its core principles of non-aligned neutrality. How best the two countries do it will determine the next level of India-US partnership.

The author is former editor of ‘Organiser’. Views are personal.

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  1. How best India can defend its right to deal with Russia against the wishes of the United States … That points to the cul de sac Indian foreign policy finds itself in today. Excellent column by Ms Suhasini Haider yesterday on the forks in the road ahead for our diplomacy.

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