India's Diplomacy In The Face Of US Tariffs Could Help Ease Trade Relations, Says Trade Advisor
US President Donald Trump announced sweeping tariffs on a range of imports, including from India, sparking global market unease and fears of a potential trade war.
India’s decision to prioritise diplomacy over retaliation in response to the Trump administration's tariff announcements could pave the way for successful bilateral trade negotiations, said Mark Linscott, senior advisor on trade at the US-India Strategic Partnership Forum (USISPF).
In an interview with PTI Videos, Linscott, who previously served as the former assistant US trade representative, praised India’s strategy as "remarkably smart", arguing it positions the country favourably for long-term economic benefits.
US President Donald Trump announced sweeping tariffs on a range of imports, including from India, sparking global market unease and fears of a potential trade war.
Despite the uproar by opposition parties, Prime Minister Narendra Modi-led government refrained from imposing retaliatory tariffs, a move Linscott described as "the right one".
He warned that retaliation often escalates tensions, citing the Trump administration's history of responding to counter-tariffs with further measures, creating a "downward spiral".
"India’s neutral and diplomatic response, though politically costly domestically, has laid a strong foundation for upcoming negotiations," Linscott said.
The two nations have committed to negotiating a bilateral trade agreement, with an initial focus on resolving tariff disputes quickly.
Linscott expressed optimism that both sides could reach an early agreement on tariffs and non-tariff barriers, potentially leading the Trump administration to lift the new tariffs specifically targeting India.
Parallel efforts are underway to finalise a "first tranche" of the trade agreement by the end of this year.
However, Linscott cautioned that a comprehensive agreement might extend into 2026 or 2027, given the complexity of trade negotiations.
One potential sticking point is India's reluctance to open its markets to US agricultural and dairy products, a sector critical to American farmers and producers.
Linscott acknowledged the cultural and political sensitivities surrounding dairy in India but remained confident that agricultural issues would be "on the table" during negotiations.
Linscott said both nations had strong agricultural interests in each other's markets, setting the stage for a "win-win" outcome.
Linscott noted the president's obsession with tariffs, rooted in long-standing grievances about unequal global trade practices, was predictable but the scope of the new measures — "universal tariffs with no major exclusions — was surprising".
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He pointed to the failure of past World Trade Organisation negotiations like the Doha Round as a source of frustration, which has now manifested in aggressive trade policies.
The economic fallout from these tariffs has been immediate and severe, with global markets reacting negatively.
Linscott warned of "unprecedented" risks, drawing parallels to the protectionist policies of the World War II period that led to economic chaos.
"Everyone is hurt," he said, emphasising there were "no winners" in this scenario.
However, he saw a silver lining for India, suggesting it could gain preferential access to the US market if it moved swiftly to negotiate.
The bilateral trade between India and the US has reached a record high of USD 130 billion.
The US exported USD 41.8 billion of goods to India while importing USD 87.4 billion of goods, resulting in a trade deficit of USD 45.7 billion.
Modi and Trump set a new bilateral trade target -- "Mission 500” -- aiming to more than double the two-way goods and services trade to USD 500 billion by 2030.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
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