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Key Points

A trade expert suggests Trump's new tariffs on India are a temporary pressure tactic rather than a permanent trade shift. The move impacts India’s key export sectors, where it holds a trade surplus with the US. Sansanwal notes the US is leveraging India’s Russia ties for negotiation advantage, not rejecting them outright. Both sides are expected to continue talks to resolve the trade friction.

Key Points: Trump's 25% India Tariff a Temporary Negotiation Tactic Says Expert

  • Trump's 25% tariff targets key Indian export sectors like electronics and pharma
  • India maintains a trade surplus with the US in affected industries
  • Sansanwal sees tariffs as leverage, not a long-term trade policy shift
  • US uses India-Russia ties as strategic justification in negotiations
3 min read

Temporary negotiation tactic: Expert on Trump's 25 per cent tariff on India

CSIS expert Gaurav Sansanwal calls Trump's India tariffs a short-term trade tactic, not a lasting policy shift, amid US-India trade tensions.

"This is a temporary negotiation tactic being used in a bilateral relationship, as far as we can assess. – Gaurav Sansanwal, CSIS"

Washington DC, July 31

The 25 per cent tariff and additional penalties imposed by US President Donald Trump on India should be viewed as a temporary negotiating tool rather than a permanent shift in trade relations, according to Gaurav Sansanwal, Fellow for the Chair on India and Emerging Asia Economics at the Centre for Strategic and International Studies (CSIS).

Speaking to ANI on Wednesday (local time), Sansanwal said the tariff impacts several key sectors of the Indian economy, including electronics, pharmaceuticals, refined petroleum products, and gems and jewellery--areas where India maintains a substantial trade surplus with the United States.

"This impacts a broad spectrum of sectors, starting from electronics to pharma to refined petroleum products to gems and jewellery, and those are important for India because India has a huge trade surplus with the US, so this is an irritant, but it is not permanent. This is a temporary negotiation tactic being used in a bilateral relationship, as far as we can assess. Therefore, this is not the final word on it, " he stated.

He added that New Delhi is likely monitoring the situation closely and working toward a resolution that serves its economic interests.

"New Delhi would be watching this closely; they would also be working to try to negotiate a deal that makes this better from the Indian perspective as well," he added.

Sansanwal's remarks come as President Trump announced a 25 per cent tariff, plus a penalty on India, effective August 1, citing trade imbalances and India's continued energy ties with Russia.

Commenting on Trump's criticism of India's relationship with Russia, Sansanwal said Washington's use of the Russia card in trade talks is a strategic move aimed at gaining leverage, not a reflection of a fundamental misunderstanding.

"India always had a different relationship with Russia, which has always been acknowledged. The US acknowledges the fact that India's relationship with Russia is different. But given that it wants to exercise more leverage over India in trade talks, it is using that as one of the items through which it can justify or add more colour to what it is trying to do," he explained.

Sansanwal also noted that the Biden administration had similarly recognised the unique nature of India-Russia ties, suggesting that this awareness continues despite Trump's more aggressive rhetoric.

"India has been clear from the beginning, and the US, right from the Biden administration, has acknowledged that India's relationship with Russia is different," he added.

- ANI

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Reader Comments

P
Priya S
As someone working in the gems export industry, this is worrying for our small businesses. Hope our negotiators stand firm - we can't let foreign powers dictate our trade policies. #MakeInIndia
A
Aditya G
The Russia angle is just an excuse. US has always been insecure about India's independent foreign policy. We must diversify our trade partners - time to strengthen ties with EU and African nations.
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Sarah B
While I understand the concerns, maybe India should also look at reducing its trade surplus with US? Balanced trade benefits both nations in the long run. Just my neutral perspective as an economics student.
K
Kavya N
This is why we need stronger domestic manufacturing! 🚀 All these years of 'Pharmacy of the World' title means nothing if one tariff can shake us. Atmanirbhar Bharat is the only solution!
V
Vikram M
The timing is suspicious - right before elections in both countries. Political leaders using trade as pawns while common businessmen suffer. When will this game end?
M
Michael C
As an American working in India, I can say both countries need each other. These trade spats come and go. The strong people-to-people ties will ensure relations remain stable despite political posturing.

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