"Temporary negotiation tactic": Economics expert Sansanwal on Trump's 25 per cent tariff on India

Washington DC [US], July 31 : The 25 per cent tariff and additional penalties imposed by US President Donald Trump on India should be viewed as a temporary negotiating tool rather than a permanent shift in trade relations, according to Gaurav Sansanwal, Fellow for the Chair on India and Emerging Asia Economics at the Centre for Strategic and International Studies (CSIS).

Speaking toon Wednesday (local time), Sansanwal said the tariff impacts several key sectors of the Indian economy, including electronics, pharmaceuticals, refined petroleum products, and gems and jewelleryareas where India maintains a substantial trade surplus with the United States.

"This impacts a broad spectrum of sectors, starting from electronics to pharma to refined petroleum products to gems and jewellery, and those are important for India because India has a huge trade surplus with the US, so this is an irritant, but it is not permanent. This is a temporary negotiation tactic being used in a bilateral relationship, as far as we can assess. Therefore, this is not the final word on it, " he stated.

He added that New Delhi is likely monitoring the situation closely and working toward a resolution that serves its economic interests.

"New Delhi would be watching this closely; they would also be working to try to negotiate a deal that makes this better from the Indian perspective as well," he added.

Sansanwal's remarks come as President Trump announced a 25 per cent tariff, plus a penalty on India, effective August 1, citing trade imbalances and India's continued energy ties with Russia.

Commenting on Trump's criticism of India's relationship with Russia, Sansanwal said Washington's use of the Russia card in trade talks is a strategic move aimed at gaining leverage, not a reflection of a fundamental misunderstanding.

"India always had a different relationship with Russia, which has always been acknowledged. The US acknowledges the fact that India's relationship with Russia is different. But given that it wants to exercise more leverage over India in trade talks, it is using that as one of the items through which it can justify or add more colour to what it is trying to do," he explained.

Sansanwal also noted that the Biden administration had similarly recognised the unique nature of India-Russia ties, suggesting that this awareness continues despite Trump's more aggressive rhetoric.

"India has been clear from the beginning, and the US, right from the Biden administration, has acknowledged that India's relationship with Russia is different," he added.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor