India-US relations: News and Discussions IV

[nandakumar]

What prevents countries from off loading their dollar reserves or converting to gold.

The supply of freshly minted gold is limited. Any shift from US Treasury instruments to gold would only push up the price gold. At what point do we say, the valuation of gold is now into 'bubble' territory?

[Dilbu]

Article by Kenneth I. Juster in Council on Foreign Relations

He expects India to cut oil imports from Russia in favour of US oil, invest more in the US, and meet certain American trade demands, possibly prompting Trump to attend the Quad summit. However, the author seems unaware of the level of distrust in India. Oil imports from Russia have actually increased and the Quad meeting in New Delhi will likely be cancelled. The opportunity to repair relations may already have passed.
Will Trump’s India Tariffs Affect a Critical U.S. Partnership?

Ultimately, the high tariff rates on India appear to me to be part of a negotiation. This is a similar tactic to what the president has used in other deals, including the trade agreements with Japan and the European Union. Nonetheless, Trump’s rhetoric and public threats could well make it more difficult domestically for Modi to take the desired measures.

I do not believe that Trump approaches these trade issues as part of a broader Indo-Pacific strategy, or as inconsistent with U.S. and Indian joint strategic objectives in the Indo-Pacific region. It would therefore be a mistake—and certainly premature—for the government of India to view these tariffs as fundamentally undercutting the strategic partnership that the two countries have developed over the last twenty-five years. I believe the president still has a strong interest in the U.S.-India partnership and enjoys his good relationship with Modi. But he also favors the use of tariffs to try to rebalance the economic relationship and, if he imposes the additional tariff, to help close another deal—one between Russia and Ukraine—for an end to hostilities.

The reaction in India has been multifaceted. Initially, because the government of India felt the parties were close to announcing a trade deal, the reaction was one of surprise that there were additional issues to address. When the level of rhetoric from the White House increased by labeling India’s tariffs “obnoxious” and calling the Indian economy “dead,” there was a sense of indignation among Indian commentators. This was exacerbated by the president’s repeated statement that he had brokered a ceasefire between India and Pakistan, which the Indians have publicly disputed (thereby irritating Trump in the process).

More recently, when the president announced the threatened imposition of a 25 percent additional tariff on August 27, India’s Ministry of External Affairs called this action “unfair, unjustified, and unreasonable,” and asserted that India “will take all necessary steps to protect its national interests.” Modi also vowed not to compromise the welfare of India’s farmers, dairy sector, or fishermen, and stated that he is personally ready “to pay a heavy price for it.” Regrettably, respected voices in India are now questioning the value of their strategic partnership with the United States.

Given the vibrant political discourse in India, Modi needed to respond publicly and firmly to the new tariffs. But he should also be careful not to paint himself into a corner and to remain open to discussing ways to resolve the current trade dispute. I understand that the two leaders are trying to arrange a meeting in the United States in late September, when both plan to attend the UN General Assembly.

Beyond these economic issues, the failure to conclude a deal could cause spillover collateral damage to other aspects of the bilateral relationship, including in defense and technology cooperation. The weakening of the U.S.-India relationship would inevitably be of strategic benefit to China—and that is not in the interest of either the United States or India. Both Washington and New Delhi should recognize that their bilateral relationship is more significant and impactful than any arrangement either of them can work out with China, which remains a strategic challenge for both countries.

While an early resolution of the Russia-Ukraine conflict would eliminate any tariff on Russian oil imports, this protracted conflict is unlikely to be settled soon. Accordingly, while it would probably be impractical for the Indians to terminate all oil imports from Russia, they may wish to quietly lower their level of Russian oil imports and substitute them with more energy imports from the United States. Some reports indicate that this process could already be starting. If so, that would enable New Delhi to request Washington to delay any implementation of the threatened tariff. And if Trump and Modi can resolve outstanding trade issues when they meet in late September, perhaps the United States will agree to drop the extra 25 percent tariff altogether, even if the Russia-Ukraine conflict has not been resolved.

Regarding the 25 percent reciprocal tariff, Trump’s imposition of this is, in my mind, a negotiating tactic rather than a desire to jettison the U.S.-India strategic partnership. Under these circumstances, New Delhi should avoid the temptation to impose retaliatory tariffs on U.S. imports, which would likely be counterproductive. Fortunately, I see no evidence that India is planning to take such action. However exasperated the Indian government may be by recent events, it should try to be as creative as possible in presenting further ideas for discussion with its U.S. counterparts.

Perhaps the Indians can carefully review other U.S. trade deals to see if there are elements that they could borrow to enhance what they have already put on the table. This could include pledges of further investment by Indian companies in the United States, the allowance of duty-free access for certain agricultural items such as cotton and blueberries, and the acceptance of some other items under limited quotas. I also recall during Trump’s first term that the two countries had outlined a proposal for limited U.S. dairy imports. Perhaps that could be resurrected.

Based on my experience, Modi is an extremely skillful interlocutor and is well suited to a high-stakes meeting with Trump. The prime minister would likely want to emphasize the strategic importance of the bilateral relationship and his appreciation for the good rapport between the two leaders over time. While Modi should be prepared to provide ideas on how to sweeten India’s offers on trade, procurements, and investments, he could also reference his own constraints as the head of a democratic government and the areas where he will need some U.S. understanding and flexibility.

Hopefully, the two leaders can then reach an agreement, with a final reciprocal tariff rate conceivably at 15 percent but in no event greater than 20 percent. Such a resolution would also pave the way for a visit by Trump to New Delhi later in the year for the Quad summit.

[A_Gupta]

> Slowly but surely both Biden and Trump are inadvertently destroying American consumer spirit.

Surely Biden would be in the past tense?

[A_Gupta]

Supposedly the US has put 64% tariff on Indian solar panels.

[saip]

> Slowly but surely both Biden and Trump are inadvertently destroying American consumer spirit.

Surely Biden would be in the past tense?

One has allegedly dementia but the other is definitely DEMENTED.

[Deans]

Slowly but surely both Biden and Trump are inadvertently destroying American consumer spirit. Problem is when that spirit declines the surplus capacities that is built by businesses to cater to that consumerism is going to decline. China is suffering right now due to that but at some point that is going to hurt American economy. Until then these Tariff games will look like a good play for the current Admin.

The Chinese and Russians can stay poor longer than the American voter.
Whatever grouse the Chinese may have against the party an Xi, they will come together against what they believe is US imperialism.
Similarly, NATOs actions against Russia have revived the spirit of WW2. Russians will make the sacrifices necessary to see this war to the end.

[gakakkad]

I am increasingly beginning to think tharki Santra is either compromised by CCP or they have some bad kompromat on him .

[Jay]

Something has unraveled beyond redemption between the US and India in the last few months. I think we are in the early days of an attempted “regime change” in India. This might not have been a planned course of action, but rather a happenstance that anti-India forces have stumbled upon—and now they are positioning their pieces to make a move.

Forget about Trump’s tantrums for a moment—no one is surprised by that—but I have never seen India’s MOE officials so lacking in answers. Maybe they are still in shock from the backstabbing by this Trump administration. I have also never seen our Foreign Minister use phrases like “no logic” or “this is unfair” while pleading the case to an audience that seems hell-bent on causing damage. For crying out loud, even the Chinese have started advising us on how to deal with Trump.

I do have confidence in this team, but the NaMo government needs to open its eyes and start recognizing that the problems created by these foreign forces are essentially the same as those created by the local Congress-Rahul gang. There seems to be a strong synergy between what the Indian opposition is saying and the Trump administration’s attacks, which are using those very same lines.

We went as far as we could with Trump until now, but the calculus has changed—and we have to adapt. We need to focus inward and do so ruthlessly if we want to come out ahead. We need to recognize that the West and other anti-India forces are not just targeting Indian influence, but Indian capital as well. Perhaps they have realized that this is the right time to spread their tentacles deeper into the Indian capitalist class to gain more control over India. That is why I believe there is so much chatter about Adani, Ambani, and other Indian billionaires. Control them, and you can control the Indian electorate to a certain extent.

We need to do what China did—protect our interests by protecting our capitalist leaders.

[Dilbu]

Modi sarkar appears to be hoping for a Ukraine deal that would end current tensions. Although India has protested against the tariffs it has not directly targeted Trump or the US govt, which has been more assertive and aggressive in its responses. If it becomes clear that Putin will not make a deal soon, GOI may adopt a more aggressive stance both internationally and domestically, as they don't have much to lose then if a regime change attempt is coming.

[Amber G.]

This is waking up
farmers here (in Ohio)!. Remember the whole saga of F-16 and Soybeans to Pak.. Now

Hitting Trump where it hurts, China's soybean shift to Brazil strains US farmers

लाहौल विला कुव्वत - After Russia and China rolled out the red carpet for Indian goods, another Brics nation, Brazil is now replacing the US as Beijing’s main soybean supplier..

[chanakyaa]

I am increasingly beginning to think tharki Santra is either compromised by CCP or they have some bad kompromat on him .

"tharki Santra" funny

One a serious note, looking purely from economic/financial perspective, approx. 7-10% of revenue for the S&P 500 companies comes from China. And, then there is higher sales of American agri/protein products, which has heavy lobby, to China compared to India. I feel like these factors drive the favoritism towards China more than anything else (and the controversial preference for G2). But this is just me interpreting based on my professional training as a finance person, and could be biased as in "If you only have a hammer, you tend to see every problem as a nail", but there is always a possibility b'cas Chinese have lot of moolah to throw to compromise tharki santra or anyone on sale.

[m_saini]

..One a serious note, looking purely from economic/financial perspective, approx. 7-10% of revenue for the S&P 500 companies comes from China. And, then there is higher sales of American agri/protein products, which has heavy lobby, to China compared to India. I feel like these factors drive the favoritism towards China more than anything else, but there is always a possibility b'cas Chinese have lot of moolah to throw to compromise tharki santra or anyone on sale.

China being 7-10% of S&P still doesn't explain the favouritism towards pakis. why bother pleasing pakis if you've already made deals with chinese? The Iran angle also doesn't make sense, there are no immediate tensions with Iranians and with Kuwait and Saudis there, the US doesn't "need' pakis (there's no ground invasion)

One "logical" explanation is Modi didn't bend the knee and neither do we have leverage like Chinese. But if knee/leverage is what it takes then perhaps chinese are the better option for a partnership.

[A_Gupta]

Supposedly there is a lot of social media chatter about how Mike’s Ambani misled PM Modi.

E.g.,
https://youtu.be/XX3cTLqVWiQ?si=w-GSrTkcFEw-6q1Z

Discover the shocking truth behind the growing rift between Narendra Modi and Mukesh Ambani. Once seen as powerful allies, their relationship is now facing cracks — and many believe America’s hidden role has fueled this betrayal. Did the U.S. play a silent game to break the Modi–Ambani bond? What really happened behind the scenes?

In this video, we uncover:
The reasons behind the Modi–Ambani fallout
How American influence may have triggered the split
The impact of this rift on Indian politics and business
The untold story of betrayal and power play

Stay tuned till the end for the complete breakdown of this political-business drama that’s shaking India!

[Vayutuvan]

I am increasingly beginning to think tharki Santra is either compromised by CCP or they have some bad kompromat on him .

There is a possibility that what he was accused of doing in "the Russia Dossier" was done in China and CCCP/Xi has the goods on him. There is also dead silence on both attempts during 2024 on POTUS. @chetak ji pointed that out already.

[Vayutuvan]

why bother pleasing pakis if you've already made deals with chinese?

To wean Pakis away from China, perhaps?

[gakakkad]

I think there are several things that POTUS did that would immediately benefit the Chinese .

1) the EV policy of actually making you pay more tax if you own EV will decimate the EV and battery industry . Advantage China .

2) resuming export of ai chips and other tech that biden cancelled .

3) export control loopholes like in section 232 will allow Chinese to export metals but make it less competitive for others.

4) the whole thing with India will end up benefiting China ultimately.

5) wilful destruction of high end biotech and quiting who will benefit China.

I am sure there are many more we haven't figured out but worth exploring .

[gakakkad]

why bother pleasing pakis if you've already made deals with chinese?

To wean Pakis away from China, perhaps?

Porkis aren't that important to figure that prominently in such equations .. they are barely the c you end after an indefinite integral . C with a capital chut.

[drnayar]

Supposedly there is a lot of social media chatter about how Mike’s Ambani misled PM Modi.

E.g.,
https://youtu.be/XX3cTLqVWiQ?si=w-GSrTkcFEw-6q1Z

Discover the shocking truth behind the growing rift between Narendra Modi and Mukesh Ambani. Once seen as powerful allies, their relationship is now facing cracks — and many believe America’s hidden role has fueled this betrayal. Did the U.S. play a silent game to break the Modi–Ambani bond? What really happened behind the scenes?

In this video, we uncover:
The reasons behind the Modi–Ambani fallout
How American influence may have triggered the split
The impact of this rift on Indian politics and business
The untold story of betrayal and power play

Stay tuned till the end for the complete breakdown of this political-business drama that’s shaking India!

isn't this pushing the narrative of sowing doubt deceit and confusion ? .. i am seeing a lot on this including this agenda

[m_saini]

To wean Pakis away from China, perhaps?

At the cost of pushing India towards Chinese? And what benefits does weaning away Pakis provide?

Pakis will finger India anyway (through Chinese) and unkil is no longer involved in Afghan either. so what's the utility in weaning away Pakis?

[A_Gupta]

isn't this pushing the narrative of sowing doubt deceit and confusion ? .. i am seeing a lot on this including this agenda

Likely. But after ignoring it for a while, and not seeing it die down, thought y’all should no about it.

[S_Madhukar]

So if Goldfish is compromised and unloading his bile on us then what does that say about R and C who are now in comfortable positions? That’s the classic small guy getting beaten while the big 3 confabulate. They may make sympathetic noises but we did not buy influence while they did.

[Added later] too early to say but this kick from US and us warming up a bit to Lizards might also be part of G2 ? I am hearing about TikTok but govt should look into 100 other items before exposing ourselves again to narratives

[Amber G.]

He was once Trump’s National Security Advisor..(and considered for Secretary of State in 2016 transition, but Trump reportedly disliked his mustache and instead chose Rex Tillerson)..but now Trump says:

I'm not a fan of John Bolton. He's a real sort of lowlife... I know nothing about it. I just saw it this morning...:

- Donald Trump on the raid on Boltan house. (Boton's house was raided after he criticized Trump on his ruining relations with India .) ..

BTW after taffifs which made no sense, this is what he ( Trumps own former NSA) said..

I want Indians to understand that what is happening at the top level with Trump isn't what the rest of America thinks. Unfortunately, Trump keeps doing this kind of thing. It's one reason why I think he's not fit to be President,'

<Worth watching the video clip

[Amber G.]

Also sharing: Atul Keshap (Chargé d’Affaires , Acting U.S. Ambassador, to India -in past and now President @USIBC)..

“US and India need to talk to each other in private to resolve their differences,”

"Washington and Delhi have proven they can have difficult conversations that address problems..”

In Newsweek: Trump's Tariffs Shock India, With New Delhi Weighing Its Options

[KL Dubey]

> Slowly but surely both Biden and Trump are inadvertently destroying American consumer spirit.

Surely Biden would be in the past tense?

One has allegedly dementia but the other is definitely DEMENTED.

They are both old men. The major/"pain in the ass" issues (pun intended) - Bhaidanwa has prostate cancer. Trump sh!ts himself in his diaper all day and night. Other things: heart disease, cognitive impairment (I would not go so far as dementia yet).