Many complications in ties with America

It is believed that PM Narendra Modi decided to address the Asean summit in Malaysia in virtual mode because he did not want a meeting with President Donald Trump prior to the trade deal being finalised. It is also true that he did not attend the signing ceremony of the Gaza peace accord in Egypt despite being invited by both the US and Egypt, and the UNGA session in New York in September this year to avoid exposing himself to Trump’s theatrics. In earlier years, regular meetings with US Presidents would be welcomed as relations were glowing. The change is because Trump is mercurial and unreliable.

His insistence on fake claims, inventing conversations and making off-the-cuff remarks b efore the me dia , embarrassing his hosts and guests alike, have made leaders avoid interacting with him unless essential. This is also the reason why India has thus far avoided announcing any date for the QUAD leaders’ summit. Trump’s unreliability in recent days has been displayed by his stopping trade negotiations and imposing additional 10 per cent tariffs on Canada over an advertisement and imposing sanctions on Russia’s largest oil producing companies, Lukoil and Ro sneft , while simultaneously seeking talks with President Vladimir Putin.

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No self-respecting nation, including Canada and Russia, will bend to such threats but will seek alternate means or allies. Hence, India invited Canadian PM, Mark Carney, to visit early next year, possibly to commence trade talks. Putin will be visiting New Delhi in December. In case of India, Trump’s repeated claims of having stopped Operation Sindoor and seeking the Nobel Peace Prize have been publicly rebuffed by New Delhi. In addition, he has slapped high tariffs and sanctions for procuring Russian oil, while claiming that PM Modi has promised to reduce Russian oil procurements by the end of the year.

His sanction of Russian oil companies impacting Indian procurements is his latest pressure on India to accede to US demands in the ongoing trade negotiations and assuage his bruised ego on his Operation Sindoor claim. For the US, India is a market it cannot lose. Trump has done all this while claiming that PM Modi is a close friend. In 2019, India acceded to US demands and stopped procuring Iranian oil. This year Reliance stopped purchasing Venezuelan oil due to tariffs.

If Russian oil is also stopped, oil prices would rise, impacting the Indian economy. An alternative, avoiding costly US oil, would have to be found. This time, continuing purchases of Russian oil may be difficult as the US has coordinated its sanctions with European nations. Aware of American pressures and intimidatory tactics, India’s commerce and industry minister, Piyush Goyal, stated during his recent visit to Berlin, “We are talking to the US, but we do not do deals in a hurry and we do not do deals with deadlines or with a gun to our head.” He added, “Trade deals are for a longer duration. They are not only about tariffs or access to goods and services; they are also about trust and relationships.”

The words ‘trust and relationships’ are intended to send a message that India will not bend on its red lines, despite pressures. While talks are on and possibly positive, no firm date for closure has been announced. By referring to US pressures, Goyal meant anti-India comments by members of Trump’s trade negotiating team and imposition of additional tariffs and sanctions. As talks have progressed, comments have reduced. While India has expanded its oil procurement options, it has not stopped obtaining Russian oil. These will be impacted as Rosneft has a 49 per cent share in Gujarat based Nyara energy. How India will bypass sanctions is to be seen.

Simultaneously, India has not retaliated to US tariffs and sanctions aggressively like China. It has offset its exports to the US by seeking new markets, inking trade deals and modifying its internal taxation policies; the Indian economy remains largely driven by internal forces. India has the advantage of a large market fuelled by its demography. Hence, a mutually acceptable trade deal is beneficial to both. At the same time India has not sought a waiver on procuring Russian oil as Germany has done from the UK. India’s ability to adjust has resulted in it being considered the world’s fastest growing economy. As per IMF, the Indian economy is expected to grow at 6.6 per cent based on its offsetting effects of increased US tariffs.

Internally, accepting US sanctions on Russian oil companies and stopping procurement of their oil will have political ramifications as it would imply that the government has bowed to US pressures. Similar would be the impact in case of a Trump-Modi meet and off-the-cuff remarks by Trump on Operation Sindoor or Indo-Russian ties. Indo-US ties, nurtured for decades, are now at an ebb. Another reason for India being targeted is that Trump’s primary interest has shifted towards trade imbalances and domestic US policies, rather than the Indo-Pacific. This implies pressure on China is no longer Trump’s major interest and hence the importance of India to the US has dropped.

Chinese stoppages of export of rare earth minerals and high tariffs is equally hurting the US economy and is unsustainable in the long term, thus forcing it to offer concessions to Beijing. Delegation level talks between the US and China, on the sidelines of the Asean summit appear to have succeeded. In case the Trump-Xi summit scheduled for Thursday is successful, then India would likely be left in the cold. The Quad appears to be the last of Trump’s interests. India therefore would need to cater for its own security requirements. An added cause for Trump singling out India, despite other nations continuing to procure similar or higher levels of Russian oil or gas, is India’s strategic autonomy.

The US is attempting to force India to select sides, thereby ditching Russia, which India is unwilling to do. India has reduced its dependence on Russian military equipment as also its oil, but will not sacrifice its ties for the US. While defence and technological cooperation continue with the US, diplomatic and trade ties face the brunt. India will attempt to navigate the current turmoil in steps, commencing with trade and then moving forward. India is patient and watchful. Any hurried action can have internal political ramifications, which the current dispensation will avoid.

(The writer is a retired Major-General of the Indian Army.)