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US President Donald Trump and Indian Prime Minister Narendra Modi visit “Howdy, Modi!” At the NRG stadium in Houston, Texas, September 22, 2019.
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As a window for India, a trade agreement with the United States closes on August 1 – when tariffs will increase to 26% – New Delhi appears to be not surprised by the upcoming term, CNBC analysts said.
This happens even as a trade transaction between the US and Japan was announced on Wednesday, which discussed point points to more access to the market for US cars and agricultural products.
Like Japan, India has resisted more market access for American agricultural products to protect its local farmers who form a significant voting unit. In recent A trading deal with the UKRefined on Thursday, India managed to keep its most sensitive agricultural sectors from tariff.
Indeed, Minister of Trade and Indian Indian Piyush Goyal recognized this The sector was sensitive to India In an interview with CNBC on Thursday.
“We are always very sensitive to the interests of our farmers, our interests (micro, small and medium -sized enterprises), and guarantee that our areas that are concerned,” Goyal said.
The bilateral trade agreement between India and the UK “set a tone for all Western states” that New Delhi is ready to trade on its own terms, said CNBC Sameep Shastri, deputy chairman of the BRICS Chamber of Commerce.
However, since the term emerges, analysts say Washington also has its reasons to complete the agreement sooner.
“Strategicly, the United States is little interested in the alienation of India. This views India as a strong partner who can form an Indo Pacific Landscape,” said CNBC Harsh V. Pant, Vice President and Foreign Policy in Observer Research Fund.
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Strategic hedge against China
The return of production to the US, especially from China, became the central principle of Trump’s economic policy.
As Trump administration is largely focused on counteracting China’s arrival on the world scene, India is a potential alternative to China in world production, CNBC analysts said.
The role of India in the management of this great rivalry is “very, very, very critical,” Pant said.
As America “positions against China’s achievement in global supply networks,” the transition of production to India becomes a natural “compromise” and may even supplement the transition back to the US, “said Cherry Varatan, head of economics and strategies at Mizuho.
For example, the United States can control some higher ends of the production network that require more technology and skilled work, while India “complements it cheaper work,” Varatan added.
Doing this, India may be able to “reduce China and place the United States more strategically”, walking on the diplomatic rope, Varatan added.
Walking on the Brics Rope
The role of India in BRICS, a group from 10 developing countries, which includes Brazil, Russia, India, China and South Africa, can also give New Delhi “a certain flexibility in US and India’s transactions,” the observer’s Pant Foundation said.
As depending on Carnegie Fund for International PeaceBLOC seeks to challenge the Western Economic Institutes and reduce the US dollar domination in the world economy.
July 6 US President Donald Trump threatened an additional tariff by 10% In the countries that are in line with the “anti-American BRICS policy”, just as Indian Prime Minister Narendra Modi was in a high-profile visit to Brazil at the BRICS summit.
Trump would Repeat your threat A week later, he said on July 18 that he “struck (BRICS) is very,” when they “are really formed to a large extent.” “We can never let anyone play with us games,” he added.
Despite the fact that they hit a tug between the US and BRICS, India seemed to avoid Trump’s anger. Really, Trump hinted Several times that the basis for trading transaction with India is near the finish line.
In BRICS, India faces increased pressure from China, which views New Delhi as “competing for a leading role” in the block, reports Varathan Mizuho Bank. Thus, it turns out that India will be useful by the United States as a counterbalance to China in BRICS.
Trump also claimed that BRICS wants to “occupy the dollar” by creating an alternative reserve currency despite the block members.
Varatan said this could be another negotiation in India’s arsenal as India may work on “convincing Trump that they are not aboard an alternative currency plan.”
He added that India could focus on what it can offer the United States, which can encourage Trump “treat them a little better because he sees them as aligned.”
India B plan
India is pushing for a greater trading transaction, even if it continues to negotiate with the US Sarang Shidor, the director of the Global South Institute, noted that in the comments by email, it was part of “increased turning in India to the strategy of many computing.”
In addition to the UK, India is negotiating trade agreements with Maldives, the EU and much more, while “keeping its strong connection with Washington as the world’s largest partner,” Shidido reports.
This diversification provides India, both at the negotiating table and in navigation on global economic turmoil. If the US imposes higher tariffs or trade with more complex concessions, India can accelerate transactions elsewhere, thus softening.
Shidido believes that this approach reflects a broader outlook in India: as an increase in power, which is aimed at multilateral, when “overcoming the world south”.
Report: The headline of this article has been updated to better display the story
