Trump’s anti-India broadside

The US under Donald Trump has had a nettlesome relationship with all its partners and even quasi-allies like India. The partners, having bought into the US security umbrella and left with no option, have been forced to lump his boorishness and acute self-interest. But it is slightly different for quasi-allies like India that are in the process of solidifying their partnership with the US. It is difficult not to discern a political motive in Trump’s intent to remove India and Turkey from the  Generalised System of Preferences (GSP) programme that gives developing countries easier access to US markets. Turkey, despite being a close NATO ally, is being punished for breaking from its fold and endeavouring to partner with Russia in Syria.

India, on the other hand, is being perceived as not dancing to American tunes in trying to corner China. It has also committed the cardinal sin of violating a recent US law that prohibits defence deals with Russia and energy trade with Iran. The Indian Commerce Secretary has been sanguine, estimating that impact at about Rs 1,500 crore on roughly Rs 40,000 crore of exports to the US under the GSP scheme. That may be widely off the mark since this is just the additional duty that has to be paid by exporters. They will lose much more when their goods are pegged higher than those of competitors from other countries enjoying GSP preferences.

The US, however, would not like to kill a milch cow. That is the reason for a grace period of 60 days. It may well be too late for America before Trump realises the concessions were not handouts but compensation to induce countries to walk in step with Washington, sometimes against their national interest. The Indian elite internalised the US security narrative about the region but Trump’s balance-sheet approach to diplomacy will complicate this endeavour to further align India’s security interests. At the same time, New Delhi needs to realise that WTO’s deadline to streamline tariffs is a mere nine months away. Its frequent tinkering of duties on farm exports, too, has not endeared itself to countries that also have a rural vote bank to consider.