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US dominates perception battle with India as they negotiate a trade deal: GTRI's Ajay Srivastava.


Date: 05-05-2025
Subject: US dominates perception battle with India as they negotiate a trade deal: GTRI's Ajay Srivastava
The US administration has been able to dominate the perception battle with its Indian counterpart at a time when both partner countries are negotiating for a bilateral trade deal, according to Ajay Srivastava, Founder of the Global Trade Research Initiative (GTRI) and a former trade officer.

Since assuming office for his second term, President Donald Trump has reiterated his stance on tariff reciprocity, emphasising that the United States will match tariffs imposed by other countries, including India, to ensure what he termed "fair trade". The tariffs have been kept in abeyance for 90 days, as several countries have contacted the US administration for a trade deal. President Trump has on multiple occasions labelled India as a 'tariff king', and accused the country of imposing high import duties on goods, among other non-tariff barriers.

"The United States has succeeded in painting India's tariffs and rules as the reason for the US trade deficit, hence demanding that India buy more American goods, oil, and weapons and dilute regulations restricting India business of Google, Meta, Amazon, Walmart, Tesla and other US firms," Ajay Srivastava has argued in an analysis.

Srivastava argues that the reality is different. He argues that India pays more dollars to the US than it gets back for trade, and the overall economic balance currently favours America.

India and the US aim to ink the deal by fall of 2025.

The trade deficit argument of President Trump against India, according to Srivastava, is far from reality.

"The picture changes completely when you include US arms sales to India, profits and royalties earned by American banks and companies, the free access US tech giants enjoy in India and over USD 15 billion spent by Indian students every year in studies in the USA," Srivastava argued.

He cited an example where a 'Made in India' iPhone sold in the US adds more to the US exchequer than in India.

Under US pressure, Indian officials, according to the GTRI Founder have urged companies to cut imports from China and buy more from the US.

"Instead of challenging the US narrative, Indian officials urge companies to cut imports from China and buy more from the US," he said

Ajay Srivastava suggested that India must tread carefully. He added that committing to a sweeping FTA under current uncertain global conditions could undermine key national interests; a limited, industrial goods-only pact would be a far safer and smarter move for India.

"India's unilateral concessions and silence have allowed Washington to dominate the perception battle. This helps them seek more concessions from India in the FTA negotiations," he noted.

India's exports reportedly rose 11.6 per cent to USD 86.5 billion, while imports rose 7.4 per cent to USD 45.3 billion in 2024-25, resulting in a higher trade surplus of USD 41 billion. The US administration imposes reciprocal tariffs on countries with a sizable trade deficit.

During their meeting in mid-February 2025, President Trump and Prime Minister Narendra Modi resolved to expand trade and investment to make their citizens more prosperous, nations stronger, economies more innovative, and supply chains more resilient.

They resolved to deepen the US-India trade relationship to promote growth that ensures fairness, national security and job creation. To this end, the leaders set a bold new goal for bilateral trade - "Mission 500" - to more than double total bilateral trade to USD 500 billion by 2030.

India's Commerce Minister Piyush Goyal was recently in the US. This follows Trump-Modi's plans to negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by the fall of 2025. The two leaders had committed to designating senior representatives to advance these negotiations.

Source Name : Economic Times

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