On Trade Deal with USA

It is only India which painstakingly worked on an FTA with USA, a draft of which, is already on Trump's table. No other country has any written deal let alone a full blown FTA. India already conceded on zero tariff on capital goods import and open market for agriculture in certain areas like meat, fruits and even milk products like cheese(what happened to blood meal?) and defence purchases. India got a bad deal because it started off with appeasement. India removed Google tax, alcohol duties, Harleys, Tesla and Starlink even before Modi went to US and even before trade deal. So all this was a tribute that India paid to Trump. Trump's trade minister had already conceded that India will not open agriculture and has bluntly said in mafia like tone that India buying russian weapons gets under the skin of USA. So agriculture is a red herring that leaders on both sides are waving at gullible citizens.

Having got the deal he wanted, Trump decided to push India more and hence raised issue of Russian oil to settle non trade related issues like Ukraine deal and who knows what else behind the scenes. Trump team is gloating that no country except China has retaliated. Trump team is not expecting any retaliation from India because it understands that decision makers' will to respond is already compromised. It is a result of not building guard rails over the years in US relationship.

China is indeed gloating and its media is egging on India to stand up to USA. A hard break in US India relations is to its advantage. One is skeptical if there will be any real response or weather India has any cards left. WTO afterall is dead now, Lula wanting collective action by WTO does not work. The only thing India should definitely do now is not sign any FTA with USA and work on diversifying trade with other countries. Hopefully India will also stop further defense purchases from USA. After all no one else has signed any FTA with USA since trump tariffs everyone had only a framework agreement, details of which they are incessantly disputing. So Trupm has got no deal with anyone till now. A US China grand bargain looks inevitable though since only China cose to standup to USA. All cards are now with China.

India should wait for internal court proceedings in USA to strike down Trump tariffs as they definitely will and wait for political turmoil in USA to start, once tariff lead inflation begins to pinch. It needs to scale back its ties with USA especially defence. It is the security dependence on US which makes USA's allies vulnerable to pressure on trade. Hopefully Indian decision makes have that much independence still left to ride it out rather than strike a bad deal. Their dream of becoming China plus has been already been shattered by Trump.