India appears unfazed as trade deadline with the U.S. nears. Here’s why

2025-07-25 07:43:10

US President Donald Trump and Indian Prime Minister Narendra Modi attend “Hudi, Modi!” At NRG stadium in Houston, Texas, September 22, 2019.

Saul Loop AFP | Gety pictures

With India’s opportunities to close a trade deal with the United States on August 1 – when the customs tariff is set to increase 26 % – New Delhi appears to be uncomfortable with the deadline on the horizon.

This comes even when a commercial deal was announced between the United States and Japan on Wednesday, which dealt with adhesion points about the greater arrival in the markets of American cars and agricultural products.

Like Japan, India has resisted increased access to markets for American agricultural products to protect its local farmers, who make up a large voting block. In her speech The commercial deal with the United KingdomAnd completed on Thursday, India was able to protect its most sensitive agricultural sectors from customs tariff concessions.

In fact, the Minister of Trade and Industry in India admit The sector was sensitive to India In an interview with CNBC on Thursday.

“We are always very sensitive to our farmers’ interests, and our interests [Micro, Small, and Medium Enterprises]Joyal said:

SHEMEP SHASTRI, Vice President of the Chamber of Commerce and Industry, told CNBC that the bilateral trade agreement between India and the United Kingdom “set a tone for all Western powers” that New Delhi is ready to deliberate on its own conditions.

However, since the deadline waving on the horizon, analysts say Washington also has the reasons for the completion of an sooner and later agreement.

“From a strategic point of view, the United States has great interest in alienating India. It sees India as a strong partner that can form the Indian and Pacific scene.”

Strategic hedge against China

The re -manufacturing to the United States, especially from China, was a major principle in Trump’s economic policy.

Because the Trump administration is largely focused on facing China’s arrival at the global theater, India represents a potential alternative to China in global industrialization.

Pant said that the role of India in managing this competition for the superpower is “very, very decisive.”

Fishno Varathon, head of economics and strategy at Mizuho Bank, said that America “is putting itself against China’s arrival in global supply chains,” manufacturing manufacturing to India is a “natural solution” and may complete the transformation into the United States.

For example, the United States can control some of the upper side of the manufacturing series, which requires more technology and skilled workers, while India “complements it with cheaper employment.”

By doing this, India may be able to “cut China and put the United States more strategic”, all while walking on a diplomatic rope, Varthane added.

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Walking

Pance said in Newzz that a role in the Brexes, a group of 10 emerging economies, which includes Brazil, Russia, India, China and South Africa, could give New Delhi “a degree of flexibility in the United States and India deals.”

According to Carneneji’s international peaceThe bloc aims to challenge the global economic institutions led by Western and reduce the dominance of the US dollar in the global economy.

On July 6, US President Donald Trump It threatened an additional tariff by 10 % In countries that are compatible with “Brex Policy against America”, as Indian Prime Minister Narendra Modi was on a high -level visit to Brazil to get the BRICS summit.

Trump will Repeat a threat More than a week later, saying on July 18 that he would strike. [BRICS] He added that it is very difficult, “if they were ever” are really formed in a useful way. “We cannot allow anyone to play games with us.”

Although he was arrested in tightening the rope between the United States and Brax, India appears to have escaped from Trump’s anger. In fact, Trump alluded On multiple occasions The framework for a commercial deal with India is close to the finish line.

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Inside BRICS, India faces increasing pressure from China, which New Delhi sees as “competing for a leading role” in the bloc, according to Mizuho Bank. As such, India appears to be beneficial to the United States as a budget for China in the BRICS.

Trump also claimed that the BRICS wanted to “take over the dollar” by creating an alternative reserve currency, despite the denial of the bloc members.

This may be another bargaining segment in the negotiating arsenal in India with the United States, as India could work to “persuade Trump that they are not on board the plan for an alternative coin.”

He added that India can focus on what transactions can be provided to the United States, which may stimulate Trump to “treat them a little better because he sees it as alignment.”

India B plan

India is pushing for more commercial deals even as negotiating with the United States, Sarang Shidor, director of the South’s World Program at the Quinnes Institute, in the comments sent via e -mail indicates that this is part of “the growing role towards a multi -important strategy.”

Besides the United Kingdom, India has held advanced talks on commercial agreements with the Maldives and the European Union, and more, while “maintaining its strong link with Washington as a global partner,” according to Cedor.

This diversification gives an India lever, whether at the negotiating table or in the movement of global economic shocks. If the United States imposes a higher tariff or relations with more difficult concessions, India can speed up deals elsewhere, thus softening the strike.

More than just hedging tactics, Shidor believes that this approach reflects the wider world’s view of India: as an emerging power aimed at pluralism with “defending the global south”.