CNN
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U.S. President-elect Donald Trump is living up to his nickname “Customs Man.” This time, he has set his sights on some of the world’s fastest-growing major economies in the weeks before taking office.
Earlier this month, he singled out the BRICS countries and threatened to impose 100% tariffs on them if they create a new currency or completely replace the US dollar with another currency.
India, a founding member of BRICS, is a powerful and central member of the intergovernmental organization, which also includes China and Russia. Like other countries, India has been a target of President Trump, who called New Delhi a “very big abuser” of bilateral trade relations at an election event in September.
President Trump also imposed tariffs on steel and aluminum during his first administration, triggering a series of retaliatory measures. It ultimately also stripped the country of preferential trade status and lifted the designation that exempted billions of dollars’ worth of Indian products from U.S. tariffs, angering Indian officials.
But despite this, the president-elect enjoys a warm personal relationship with Indian Prime Minister Narendra Modi. Four years ago, when the president visited Prime Minister Modi’s home state of Gujarat, the two were effusive in their praise of each other. Officials say the relationship is likely to work to India’s advantage during President Trump’s second term.
Harsh Pant, vice president of the Observer Research Foundation in India’s capital, told CNN that other original BRICS members Russia, China and Brazil are known to be “emotionally anti-American.” spoke. “India remains a country where this is not the case.”
He said New Delhi was an outlier in the group and could be well-positioned to quash talk of de-dollarization, especially given its importance.
The idea is a long-standing ambition of some members, and could theoretically see the group aim to stop using the dollar and either create a new currency or move to another bid entirely. Using other currencies could potentially allow member countries to reduce their dependence on the US dollar.
“President Trump breathing down the necks of the BRICS, telling them to not go down that path, has given India more room to maneuver,” Pant added.
This allows India to argue that the group should act cautiously to avoid provoking the highly reactive United States, Pant said.
India’s Foreign Minister Subrahmanyam Jaishankar said this month that India is not interested in a weaker dollar.
There is still considerable pro-Washington sentiment in India’s capital. According to some observers, the belief that China, and the United States, are on a collision course with the Asian superpower is driving the U.S.-India relationship.
“His first term was very positive and ultimately the relationship he built with Prime Minister Modi worked well for India as well. So there is a sense that a second term might not be so disruptive.” said Pant.
Mr. Modi and Mr. Trump developed a personal bond during Mr. Trump’s first term. Mr. Modi was praised at a rally in Texas in September 2019 titled “Howdy Modi.” The “Namaste Trump” rally in Ahmedabad in February 2020 drew 125,000 people, and the favor returned to President Trump.
Michael Kugelman of the Wilson Center’s South Asia Institute in Annapolis, Maryland, also believes that the incoming Trump administration may be able to get closer to India to some extent than the Biden era, especially on issues such as Ukraine and human rights. I think there is.
“Trump and Modi’s worldviews are much closer and much more aligned than the Biden/Obama and Modi worldviews,” he said.
Regarding Ukraine, he added that neither Trump nor Modi has criticized President Vladimir Putin for the 2022 invasion, and both have recently called for peace. President Trump has said he would end the war within 24 hours, and Prime Minister Modi offered to help broker peace during a visit to Moscow in July.
However, India will not be completely immune from the occasional turmoil associated with the Trump administration.
Kugelman said the 10% universal tariff threatened by President Trump would have an impact on India, in part because India enjoys a trade surplus with the United States.
U.S. data shows trade between the two countries heavily favors New Delhi. Over the past two years, the U.S. imported about twice as much as it exported.
India is becoming an increasingly important manufacturing hub for companies like Apple, especially as they look to build supply chains outside of China.
In the first 10 months of this year, the US imported $73 billion from India, while exporting to India was $35 billion.
Mr. Kugelman and Mr. Pant agree that while the trade imbalance will be a headache for New Delhi, it is not an insurmountable problem. Rather, discussions about trade and policy may become more transactional.
“This is just President Trump’s approach, so even strategic partners like New Delhi will have to adapt,” Kugelman said.
Trump is a “deal maker,” Panto said. “It’s always about give and take. So a long-term approach to policy-making needs to give way to a more ad hoc approach… instead of looking five years down the road, deals that can be struck now are What is it?”
Pant points to a waiver Washington granted New Delhi in 2018 regarding Iran’s Chabahar port. This waiver was necessitated following the reimposition of sanctions against Iran. The restrictions prohibited all U.S. companies, foreign companies, and countries from doing business with Iran.
New Delhi had a 10-year, $500 billion deal with Tehran to operate and operate the port. India views the port as a key trade route to Central Asia and Afghanistan, bypassing arch-rival Pakistan.
The waiver was part of then-President Donald Trump’s South Asia policy. In a 2017 speech, he called on India to support the United States with more economic aid to Afghanistan. He used a highly profitable deal between the two parties as a bargaining chip.
“If you can represent your interests transparently and do business with him, it might not be as bad as it is,” Pant added.
India has demonstrated that it can walk the fine line between pursuing its own interests while staying on President Trump’s good side. Time will tell whether that can be replicated, but the view from New Delhi appears optimistic.
