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In an exclusive interview with India Today, Professor Jeffrey Sachs, Director of the Center for Sustainable Development at Columbia University, hailed Prime Minister Modi's handling of the India-US trade deal.
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00:00So Union Commerce Minister, Piyush Goyal, he's just said that this is just the first
00:08tranche of that larger trade agreement with the United States of America and a joint statement
00:13perhaps is due in the next four to five days. So from those punishing 50% tariffs, now down
00:19to 18%, is the India-US relationship returning on an even keel? Joining me on India first to
00:28talk more about the trade deal and its impact is Professor Jeffrey Sachs, Professor and Director
00:34of the Centre for Sustainable Development at the Columbia University. Professor, welcome.
00:39Such a pleasure to have you on the show. You're reading, you're reading, Professor, of President
00:46Trump's moves from calling India a dead economy in August 2025 to saying India is lost to China
00:54and Russia around the time of the SCO summit in Tianjin. President Trump suddenly announces
00:58the trade deal with 18% tariff. In your view, sir, what explains this dramatic turnaround?
01:04Did he blink? Who blinked first?
01:07Well, of course, Trump blinked. Trump is completely inconsistent. And he's all over the place.
01:18The policies of punishing India were absurd based on ignorance. Now things are coming back to at least
01:28back to a little bit of normalcy. But when you say, are things on even keel? No, because there is no
01:36even keel with the United States government right now. I just want people to understand, we in the
01:42United States are in a political crisis. We have an out of control president. We have troops in our
01:50cities. We have random policies internationally, sometimes war one day, the next day peace, the
01:58next day war. This is very erratic. It is not based on strategy. It is based on the whim of the president.
02:07Prime Minister Modi did a good job. Keep calm. Get these absurd 50% tariffs back down. But your
02:18commerce minister is very enthusiastic. Oh, this is a great relationship. Just be careful. India is too
02:26big a country, too important to make its future based on the United States. India's future should be
02:34based on normal economic relations with all parts of the world, with Europe, with the United States,
02:42with Russia, by the way, with China, by the way. India's a great superpower. Don't think that the U.S.
02:50is somehow some special treat for India. It's just one of many trade partners.
02:57That's a very important point to make, sir. In fact, the Indian prime minister said something
03:03similar in parliament when he said there are nine major trade deals that India has been able to
03:08ink. Professor Sachs, India hasn't confirmed what President Trump said about either investing $500
03:15billion in America or pledging that, or even, you know, his claims that India will not buy
03:20Russian oil or is to stop buying Russian oil. Are you of the view that he's already announcing his
03:27wins before the fine print is settled? Or is this his deliberate strategy? It leaves room for future
03:34escalation or sudden reversal? Like you say, he is erratic. There isn't a policy.
03:41First, it's very important to understand Donald Trump does not tell the truth. He doesn't care.
03:48And when he lies, it'll be another lie the next day. We don't know what's in the agreement. Maybe by
03:56accident he said something true, but that would be a coincidence. He lies for a living. That's his
04:03tactic. I think it's not very smart, but that's his tactic. His tactic is, I will keep everybody
04:10unbalanced. I will say what I want. Typically what he says is hot air, empty. Did India,
04:18promised $500 billion of spending? How? In what way? In a budget? Of course not. So the whole idea
04:26in that sense is ridiculous. He comes up with numbers. He makes grandiose statements because
04:32Donald Trump wants to look good each day. This is his impulsivity. He doesn't care that looking good
04:42today will look very funny the next day when what he says today is shown not to be true because he'll then
04:49make another claim the next day and in that way keep everybody off balance. If you actually looked at the
04:58list of things that Donald Trump has said over the past year and held him to them, of course you would see that
05:05this man has hardly spoken the truth at all. It's a tactic. I don't know if it's a, it is a tactic, but boy, it's not a
05:13strategy. It's not getting us anywhere. It's not getting India anywhere. And just don't be too enthusiastic about the
05:21United States. There are some nice people. There are some good businesses, but it's just 12% of world
05:28trade. It's 14% of the world output. It is 4% of the world population. India's future is with the rest of
05:39the 90%, if I may say so, that it has relations with all the rest of the world. The more important thing for
05:46India this year is the BRICS presidency. The BRICS are half the world population. The BRICS are much larger than the
05:55G7 countries. Enjoy that. The BRICS are the fast-growing part of the world economy. So this is really the important event
06:04for India is the BRICS presidency.
06:07Because even Prime Minister Narendra Modi, and I'm glad you said that, the Prime Minister, when he traveled to the United States
06:13last year, he spoke of $500 billion of bilateral trade by 2030, and one year was already lost in that since
06:222025 and now 2026. But White House Press Secretary Caroline Leavitt, she said words to the effect that India has
06:29committed to not only no longer purchasing Russian oil, but buying oil from the United States and
06:35Venezuela. Sir, isn't the United States, if it does insist that India buys the Venezuelan oil, I mean, if it suits
06:42India, India will, but if it doesn't, does that not compromise India's energy security and
06:48independence? Of course it would. I hope that India just abides by normal trade, not bullying from the
07:00United States or anyone else. Look, everything about what's happened in the last year has been
07:06bizarre. The United States punished India for buying things from Russia while the United States buys
07:14things from Russia. Europe buys things from Russia. This is totally arbitrary. It's whimsical. So
07:22India, with 1.5 billion people, cannot be whimsical. It needs a long-term strategy. Humoring Donald Trump,
07:32that's fine. That's a good tactic. But understanding that India's future is not some magic relationship
07:40with the United States, jumping up and down about how wonderful this is, but just measured that, yes,
07:47the United States has come back to some of its senses. I wouldn't say all of them, but some of its
07:52senses. And this is fine. And we can work with this is the right approach. Other countries have less than
07:5818 percent tariffs. Some have 19, 20 percent. It's not a big deal at this point. The U.S. market is not
08:07the make or break of India's future. This is, I think, the more important point.
08:13Oh, you're absolutely right, sir. And in fact, I remember reading somewhere that India politely but
08:20firmly told the United States of America that India will not push for it. India will not bend over
08:25backwards. India is happy to wait it out, or what's to that effect, and wait out the Trump
08:29presidency. Sir, you've said Trump is backing down from most of his trade wars all over the world.
08:36You've described India-U.S. deal as part of that retreat. Do you see this, perhaps, as Washington,
08:43D.C., conceding ground, finally, to India, since India did not, you know, cede ground?
08:51Yes, definitely. Trump announced wild tariffs in the beginning of this second term. And basically,
09:02they're coming down to a range of 10 to 20 percent, because the whole thing was misguided.
09:09It's led to a lot of consternation inside the United States, because it has disrupted our own
09:16economy. This kind of whimsical operation where one person issues decrees by the day doesn't suit
09:27a modern economy. So they are calming down. Maybe they're calming down their boss, who's a very
09:34irascible, not very bright guy, and telling him, this is good for us. Maybe that's what's happening.
09:42But it is happening around the world that super high tariffs, somebody explains to Mr. Trump,
09:50this isn't really a good idea. This isn't really working. Just strategic patience, I think, is paying
09:58off. And it could well be, and we'll talk about it if it happens, that the U.S. Supreme Court
10:05sometime soon says all of this was an abuse of power by the president. I hope they say that,
10:13because Trump absolutely is exceeding his constitutional authority. The power to
10:20levy tariffs belongs to the U.S. Congress, Article I, Section 8. But Trump is announcing
10:28emergencies, emergencies. These are not emergencies. These are whims of the president. And I hope that
10:35the Supreme Court is honest enough and brave enough to say to the president of the United
10:41States, you don't have that authority. We are a constitutional system, not a one-person rule.
10:48You know, it's also very interesting. You know, you feel that the Supreme Court may strike this down.
10:55Would it then go back to what it was originally, 3% to 5%? Or as Piyush Goyal says, that this is just
11:01the first tranche. Subsequently, when that wider trade deal details come out and it's worked out,
11:06could it come down even below 18% in your view? Because you've also, sir, you know, since you
11:10mentioned that some of his advisors may not be advising him correctly, you've described Peter
11:15Navarro as completely, in your words, completely incompetent and economically ignorant, or words to
11:20that effect. Do you think it's there, that advice that President Trump took, which led him down this
11:27road that actually kind of messed up relationship with India? Yes, indeed. I've described Mr. Navarro
11:35more specifically as the worst PhD my economics department ever granted, because he was a student
11:41in the Harvard economics department. He either did not take my course or did not listen to any word I
11:49said, because he speaks economic nonsense from morning till night. But he definitely had some
11:57influence. And he was a loudmouth when it came to insulting India in this past year. Disgraceful.
12:05So Trump is influenced by these people because Trump doesn't know anything about these issues. So
12:13somebody gets to him and tells him something. He does something. He's very impulsive.
12:18The next week he does something different. Again, with India's strategic direction,
12:27don't overdo it with the United States. Be moderate, careful, cautious, and don't think that India's
12:38future is that, for example, it's the new China in the US supply chain. That's not going to happen.
12:46The US is too unstable for that. It's too slow growing for that. It's too protectionist for that.
12:53So India needs to diversify. And I just hope that your commerce minister is as enthusiastic about the
13:00other trade deals as he is about this trade deal, because the new trade deal with Europe is very good.
13:06I'm still hoping. I know it sometimes cuts across the grain. But India and China have a lot of positive
13:16trade that they can do. And I'm hoping for that as well. Of course, it requires good stability on the
13:23other bilateral issues. But these are the two greatest countries of the world, the two between them with
13:30almost 40 percent of the world population. If India and China are trading well, that's a huge plus for
13:37India in the years ahead as well. So that's what I'm hoping for. And for India's strategy, see this as,
13:45okay, it's a relief from the craziness of last year. But it's not a strategic new direction for India.
13:56India's strategic direction is good trade relations with every region of the world.
14:02In fact, that perhaps was the effort that India was moving forward in, you know, with all the
14:10conversations between Prime Minister Narendra Modi and Chinese President Xi Jinping until Doc Lam in
14:142017 and then Galwan in 2020. But subsequently, especially post what happened in Russia at the BRICS summit
14:26and then SCO Tianjin, do you see that relationship perhaps move in the right direction? Or that
14:33strategic mistrust, especially after Galwan 2020, is too much? That relationship will take a long time
14:40to repair. Even the India-US relationship post these tariffs will take a long, long time to mend.
14:47Look, if we look at India and China, the two biggest countries in the world, two vast
14:56civilizations. And they will be the number one and two economies of the world at mid-century.
15:05What they have in common interest is so much bigger than the border disputes that I would urge the two
15:14sides, solve the border issue, because the whole world is a part of your future. To understand how the
15:23two biggest countries of the world, the two biggest economies can cooperate with each other, there
15:29the stakes are huge, because the benefits of positive cooperation would be absolutely enormous. And these
15:36border issues, if I might say, while they're serious, they were made by the English. They weren't made by
15:43India or China. This is some disastrous line drawn in 1914 arbitrarily. And this is where the two great
15:54nations should say, come on, let's move beyond that, because we have so much we can do together.
15:59That's my own view of it.
16:00Now, that's a very sensible view. And you're absolutely right about that. And let's sincerely
16:07hope there's forward movement and they're able to, you know, get over the hump when it comes to that
16:12problem. Sadly, that that couldn't happen earlier. Is there a new dawn? That remains to be seen. But
16:17Professor Sachs, you also called that 50 percent tariff on Indian imports a blunder, that it violated
16:23every strategic principle that should have been applied to India-US relations from the American side. So,
16:28in your view, sir, what was that strategic miscalculation by President Trump? Did he think
16:32India will buckle, that Prime Minister Narendra Modi will bend? And your reading of India's response,
16:38sir? He was probably under pressure from some warmongers in the United States. We have some
16:47terrible senators, loudmouths like Lindsey Graham of South Carolina. And Lindsey Graham was saying,
16:55maximum pressure on India, maximum pressure on India. So, the way Trump operates is maybe Lindsey
17:01Graham came into his office and Trump said, OK, put an extra 25 percent penalty on, without any idea
17:10of the consequences of that. It was flippant. It was a blunder. Then he had Navarro and Lutnik and
17:18others go out and make insulting statements about India. This isn't strategic. This is not even tactical,
17:26in my mind. It's just ignorance. And it felt like ignorance last year. It's now being corrected. Of
17:34course, the way Trump operates is that everything he does is right and every retreat is an advance and
17:42every move is the greatest thing ever. So, you never hear anything sensible about this. But my view is
17:48they blundered badly last year. And now they're retreating from that blunder. Let's hope that
17:54things are moving in the right direction and that there's a new dawn with the trade ties. Of course,
18:00the other two parts of the compact, whether it's the defense relationship or the high-end technology,
18:05that too perhaps should improve. But it's such a privilege talking to you and hope you're back
18:10on India First very soon. Professor Sachs for joining me here on India Today. Many thanks. Thank you.
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