This special report unpacks the complex web of India-US trade relations under President Donald Trump, focusing on the impact of his unconventional tariffs and the diplomatic tightrope India walks over its purchase of Russian oil. A key quote from policy analyst Ashok Malik highlights the Indian perspective: 'National interest doesn't exist to facilitate diplomatic conventions.' The discussion, featuring insights from former diplomat KC Singh, delves into whether India should pursue quiet, backroom negotiations or take a more assertive public stance against Trump's unpredictable policies. The debate also explores the internal challenge of agricultural reforms, with the massive farmer protests against farm laws serving as a critical backdrop to any potential trade deal with the United States.
00:00Alexander Stater, is there a realization though where you are in Washington that Donald Trump is leading the world into a very dangerous path with sort of ultra-nationalism at one end, upending the multilateral trade order that existed or a global trade order with his unconventional use of tariffs as a weapon?
00:24Is there finally a recognition that eventually America will pay a price at some stage for what Donald Trump is doing?
00:31Is there finally that recognition coming in almost six months after he first sort of used in April tariffs as a weapon?
00:40It's a difficult question to answer because, you know, the U.S. economy itself is in a strange state.
00:48Earlier in the year, it looked like it wasn't growing at all.
00:51And then the second quarter growth was actually quite impressive.
00:54Parts of the U.S. economy are growing extremely well.
00:57Many people point to the AI boom as the main driver of growth in the United States.
01:03And there's evidence to suggest that that is exactly what's happening.
01:07Other parts of the U.S. economy appear to be weaker.
01:11China's retaliation against the United States in this current trade spat involves not buying any soybeans from the United States.
01:17And so there's discussions here about a $10 billion bailout for U.S. soybean farmers.
01:21So parts of the U.S. economy are being hurt by these extended trade discussions.
01:27But other parts of the U.S. economy feel very good about it.
01:30I think certain domestic interests like steel producers, lumber producers, aluminum producers,
01:38think that the tariffs that President Trump has imposed are wonderful because effectively it allows them to charge higher prices for their goods.
01:49So it's actually a pretty complex question to answer at this point in time.
01:53I do think personally, ultimately, the long-term interest of the United States involves a more open economy and good relationships with its allies around the world, including India.
02:05And I'm hopeful that we'll come to a resolution on that soon.
02:08So let me come, Ashok Malik, to where, in a way, circle back to that key issue.
02:18Should India now stand up in some way to Donald Trump every time he makes these comments that seemingly embarrass India,
02:26give the opposition another talking point?
02:29Or should the focus be on quiet backroom negotiations?
02:33We've got the Commerce Ministry team even now in Washington as we speak and get the trade deal done.
02:40Whatever else happens with the Russian oil deal, separate that from the trade deal.
02:45To be honest, India has managed this with some dignity and with some effective diplomacy because it's Trump's rhetoric that has changed.
02:55Trump is still saying don't buy Russian oil. I agree.
02:58But his language today was collaborative, was, you know, conciliatory.
03:03It's said that you can do it gradually in the next few, I presume, weeks.
03:08You can go back to Russia after the war is over.
03:10He didn't call India a dead economy. He wasn't abusive.
03:14Some weeks ago, he and his team had been, frankly, abusive and got people very riled up in India, unjustifiably so.
03:21Today, he was more collaborative.
03:22So, obviously, some diplomacy has happened in the background for which India needs to get credit as well.
03:29And quite honestly, I have to disagree with Mr. Casey's thing.
03:33He's an old friend and he's a diplomat.
03:36I think it required the government in India to engage an ambassador-designator.
03:42These are extraordinary circumstances.
03:45Yes, it was a violation of diplomatic conventions to engage Gore.
03:48But diplomatic conventions exist to facilitate national interest.
03:53National interest doesn't exist to facilitate diplomatic conventions.
03:57And it wasn't a national interest to engage Gore.
03:59Well, then what was the need for the spokesman of the ministry to contradict it?
04:26If you think that things are changing and Trump is only sending positive signals, what was the need to say?
04:34There was no discussion between the prime minister and the president.
04:38We are the ones who reacted to that.
04:39No, because it is embarrassing.
04:40Because it is embarrassing.
04:41It is embarrassing for a government that claims to have an independent foreign policy to be told by the U.S. president
04:46that we've got an assurance from the Indian prime minister, we will not buy Russian oil.
04:51I'm answering Mr. Malik's thing that if we are seeing such positive reaction out of U.S., then what will the need to do it?
05:00We are doing it because Trump is unpredictable.
05:03Because you don't know what happens tomorrow.
05:05You don't know what will be the final outcome.
05:08You see, there are two parts to the trade deal.
05:10One is the Russian part, the 25%.
05:12And then there is the other 25%.
05:14The latest Economist magazine has done an article which says actually most of the tariffs that he has imposed,
05:22in reality, if you take the exceptions that he has made, it's working out to much less than 20%, 25% for each country,
05:29even for Canada or for Mexico.
05:31So it's a very confusing and very confused state of affairs.
05:34And in that, to get a trade deal, you know, one of the gentlemen in your panel was saying that we can reform agriculture in India.
05:44You saw the farmer's agitation.
05:47It's not an easy thing to just reform agriculture in India.
05:50How do you do it?
05:51The bulk of the people in India are dependent on agriculture.
05:54How do you overnight reform it?
05:56Okay.
05:57It's just not possible to do it.
05:58You see the kind of agitation which took place over the farm laws.
06:03Yes, William, you want to make a final point.
06:04The final point is India really has to reform its agricultural sector.
06:09It is far too large for the growth trajectory that India is capable of.
06:16It has to shift labor and other resources out of agriculture into manufacturing and services, especially high-tech services.
06:25This is a chance to do so.
06:27You know, don't protect your farmers through tariffs if lower tariffs endanger their livelihoods, temporarily subsidize their incomes.
06:41This, India has to move into the second quarter of the 21st century.
06:49The agricultural sector should not be an obstacle to trade deals with the U.S.
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