India under pressure to seal trade deal with U.S. as deadline looms
US President Donald Trump and Indian Prime Minister Narendra Modi “Howdy, Modi!” Houston, NRG Stadium in Texas, September 22, 2019.
Saul Loeb | AFP | Getty Images
The pressure of sealing a trade agreement with the United States has concentrated this week before an August 1st deadline, which will see that tariffs rose to 26%.
A trade agreement between the United States and Japan was announced on Wednesday, which addressed the points that adhered to more market access for American cars and agricultural products, and contributed to the urgency of the new Delhi.
Like Japan, India has resisted more market access for American agricultural products to protect local farmers that make up a large voting block. In the latest trade agreement with the UK, which resulted on Thursday, India managed to protect the most sensitive agricultural sectors from tariff privileges.
Indeed, the Indian Trade and Industry Minister Piyush Goyal admitted that the sector was sensitive to India in an interview with CNBC on Thursday.
“We are always very sensitive to the interests of our farmers, [Micro, Small, and Medium Enterprises]And it will ensure good protection of our fields of concern, Goyal Goyal added.
However, while the window of sealing a trade agreement with the United States closes, analysts say Washington has a reasons for concluding an agreement, not later.
“Strategically, the United States has little interest in alienating India. He sees India as a strong partner who can shape the Indo-Pacific landscape.” He said.
Strategic fence against China
Bringing production, especially from China, has been a central principle of Trump’s economic policy. Analysts told CNBC, for this purpose, India represents a potential alternative to China in global production.
Since the Trump administration is largely focused on opposing China’s coming to the global stage, this makes India’s major power competition a role in “very, very, critical” management.
Since America positions itself against China’s global supply chains, shifting production to India becomes a natural “compromise” and can even complete return to the USA. “He said.
For example, the US controls some upper end of the production chain, which requires more technology and talented labor, and India completes it with cheaper labor. “
In doing so, India can “cut China and position the United States more strategically”, all of them added Varathan while walking on the diplomatic rope.
Walking the BRICS Rope
The Pants of the Observer Research Foundation’s pants, Brazil, Russia, India, China and South Africa, the 10 developing economic group, BRICS’s role in BRICS, said the new Delhi can provide “a degree of flexibility in the US-India agreements”.
Accordingly Carnegie Foundation for International PeaceBloc aims to challenge the global economic institutions under the leadership of the Western and to reduce the dominance of the US dollar in the global economy.
On July 6, US President Donald Trump threatened 10% more tariffs on “anti -American anti -American BRICS policies”, just as Indian Prime Minister Narendra Modi made a high -profile visit to Brazil.
Trump becomes Repeat your threat A week later on July 18 “he said he will hit [BRICS] Very, very difficult “if” if they really occur in a significant way. “” We can never let anyone play with us, “he added.
However, despite the war tugboat between the US and the BRICs, he seemed to escape the wrath of India Trump. Indeed, Trump implies that the framework of a trade agreement with India was close to the finishing line.
According to Mizuho Bank’s Varathan, India in BRICS is faced with increasing pressure from China, who sees the new Delhi as “competing for the leadership role”. For this reason, India seems to be useful for the US as a balance against China in BRICS.
Trump also claimed that he wanted to “take over the dollar” by creating an alternative reserve money despite the denials of BRICS’s block members.
This may be another bargaining chip in India’s negotiating with the US, Varatan said that India could try to convince India to convince Trump that they are not with an alternative currency plan. “
He added that India can focus on what India can offer to the United States, which can encourage Trump to “treat them a little better because it sees them as aligned”.
India’s Plan Plan B
Even if India continues to negotiate with the Global South Program Director in the Quinty Institute, US Sarang Shidore, it is pressing for more trade agreements.
In addition to the UK, according to Shidore, while making forward negotiations about India’s Maldives, EU and more trade agreements, “maintaining strong connection with Washington as the largest global partner”.
This diversification provides leverage both at India’s negotiation table and in global economic shocks. If the US applies higher tariffs or trade trade, India can accelerate agreements elsewhere, thus softening the coup.
Shidore, which is more than just a protection tactic, thinks that this approach reflects the wider world view of India: as a rising force aiming at multilateral when defending the global South.
