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India bets on Modi-Trump warmth to navigate choppy future with US

Sunday 9,Nov 2024 {HMC} During his campaign for re-election, Donald Trump repeatedly threatened major tariffs on imports from a range of countries. Beijing bore the brunt of his attention — he threatened a 60 percent tariff on Chinese products. But India was a major target, too — he described the country as a “major charger” of tariffs, and promised to do the same in return.

Now, as Trump prepares to take office again after a stunning win over Vice President Kamala Harris in the US presidential election, his plans for trade barriers and his anti-immigrant rhetoric threaten to inject tensions into bilateral relations with India.

The US is India’s largest export destination and consistently ranks among its top two trade partners.

“India-US relations could actually get strained if all these election promises that Trump made are implemented,” said Biswajit Dhar, a distinguished professor at the Council for Social Development, New Delhi. “If he goes through with them, this will be very, very bad news for India.”

But there is a ray of hope said Dhar: Prime Minister Narendra Modi’s personal “bonhomie” with Trump could help New Delhi navigate an otherwise bumpy road ahead.

While higher tariffs may end up raising the cost of imported goods for US customers, it could also hurt key Indian export-oriented industries, from information technology and cars to pharmaceuticals.

Analysts at the London School of Economics have predicted a GDP loss of 0.03 percent for India, and 0.68 percent reduction for China. “India would be among the hardest hit because the US is our largest market. That’s the source of our biggest concern,” said Dhar, the international trade expert. “During the first term, Trump got into this whole ‘protectionist mode’, but upon his return this time, he will come knowing that he has gotten a mandate for these policies.”

Underlying trade tensions between the US and India, because of the imbalance in their trade — with India the dominant exporter — have largely stayed under wraps for the last four years under the Biden administration, said Michael Kugelman, director of the Washington, DC-based Wilson Center’s South Asia Institute. “But the tensions could rise to the surface now and explode in the new Trump administration.”

Walter Ladwig, a senior international relations lecturer at King’s College, London, agreed that “trade has always been a difficult issue in bilateral relations” and remained “front and centre” during the earlier Trump years.

Source Al-Jaziira 

WARARKA