• Article includes why the trade deal has taken so long (expert Ajay Srivastava views), what India must remember, author Robinder Sachdev on decoding Trump, the U.S. approach so far and what should India do.

I read a very interesting article by trade expert Ajay Srivastava in the Business Standard (5/1/26) titled Why the India US Bilateral Trade Arrangement is taking so long to conclude  The author made the following key points –

1. U.S. has signed trade agreements in Trump2 essentially with countries whose security it guarantees i.e. UK, Japan, South Korea and EU. In July 25, the U.S. and Indonesia agreed to a framework for a bilateral trade agreement. Other exceptions are Malaysia, Thailand and Vietnam.

2. The FTAs are invariably on U.S. terms.

3. The U.S. literally wants – 

a. Unhindered access to India for its agricultural products.

b. Online platforms like Amazon to sell like Jio i.e. stocks based model.

c. To use trade tools for political pressure for e.g. digital rules, data flows, defence purchases.

d. Data for U.S. digital companies to be stored only in the U.S.

e. India not to purchase Russian Oil and Defence products.

4. How can Modi Trump have a trade deal related call when hard policy choices remain unresolved.

Trump2 wants a trade deal, except with China, where the U.S. hits every ball for a six.

India must remember that-

a. It is the most populous country in the world at 140 crores plus representing a huge market for all other countries, U.S. included. 

b. Even though on a lower base, it is growing at 6 to 7% per annum.

c. It has a huge reserve of talent and labour that the world needs.

d. It has exported knowledge of Yoga and Numerals without earning any royalty.

e. U.S. Investments in Artificial Intelligence needs consumers who exist in India. U.S. AI companies will not have access to China or Russia. 

f. It needs Capital and Technology, which the U.S. can provide.

g. Resident NRI’s have to stand with the U.S. even though they remit billions of dollars to India every year and support India’s civilizational resurgence.

h. The U.S. is not a reliable defence partner for e.g. GE engines for Tejas. U.S. equipment is expensive and does not involve transfer of technology.

i. Indian I.T. companies like TCS, Infosys earn large revenues from the U.S. American companies needs their services as much as they need the revenue.

j. The U.S. is a huge market for gems and jewellery, shrimps and textiles. India must look to diversify exports.

h. Indian Pharma exports to the U.S. are generics that keep prices low in the U.S. Any increase in tariffs will increase end consumer prices and inflation. Read 3

i. The U.S. refinery capacity is more for processing hard crude. For processing light crude that the U.S. produces mostly currently, it needs countries like India.

j. The U.S. is against India’s Atma Nirbharta approach. 

The U.S. Approach so far

1. Robinder Sachdev, author of Trumpotopia – A Guide to Decode Donald Trump says Indians must understand How Negotiations in the Real Estate sector happen in New York. The style is bluffing, setting artificial deadlines, knowing more about the other party than the other party knows about themselves, using the media to build your narrative, having meeting in a setting which intimidates the person meeting etc.

The U.S. government approach to the trade deal reflects this approach, correct!

2. Trump wants to negotiate himself – he wants the other leaders to talk to him and strike a deal (Commerce Secretary recent statement). Thus, Trump likes strong leaders even if they are dictators. Leaders who can close a deal and deliver.

3. Trump wants the world to take him seriously and not someone who shoots from the hip. Ego strong hai. He wants leaders who say yes to him.

4. Once something gets into Trump’s head, say Greenland, he is at it. 

5. Blame India’s purchase of Oil funding Russia’s war with Ukraine.

6. Make statements from time to time that show Indian government in poor light

7. Provide give fuel to the opposition like saying India is a dead economy.

8. Provoke India to pick up a fight.

9. Highlight shortcomings in India – like high debt, health of Indian democracy, treatment of minorities, human rights etc. 

In short, use Saam Daam Dand Bhed to win a deal.  

What can India do

1. Not get into a public spat with the U.S. President. Let the MEA spokesperson or Commerce Minister respond.

2. Let the deal be closed at the bureaucrat/Minister level.

3. Import Corn and Soyabean (modified variety) for use in production of Ethanol.

4. Not buckle under U.S. pressure. Even if duties increased to 400%, the U.S. will not levy higher tariffs on smart phones and generic pharma products.

5. Continue buying arms from Russia, reduce the quantum of oil purchased from Russia by developing newer sources other than the Middle East.

6. Let actions speak.

7. Recharge commercial ties with China without lowering your guard.  

Trump2 will continue to up the ante until it gets what it wants. India must not give in and continue to work together with the U.S. in areas where there is convergence whilst developing other markets.

Give Trump a face-saver deal by which he can tell the world he has won.

Trump has changed many rules of the game in international trade and geopolitics, some of which were required. Only time will decide his success rate. The midterm polls in the U.S. seems the only thing that can stop Trump, at this point.

Also read

1. Explained Why the U.S. IMPORTS Petroleum Products from India

2. Understanding U.S. Economic Data

3. US Needs Indian Pharma products and India needs US market

4. Look at the Trade Deficit numbers after removing APPLE Exports to USA

5. Explained US China SOYABEAN Trade

This article can be republished only with written approval of www.esamskriti.com