Transcript
Laura Coates: A particular meeting between Modi and Trump. I’m wondering who was it a success for? Modi? India? Trump? Relationships? Well, we’ll talk about it with Dan Markey, the USIP senior advisor for South Asia. Good morning, how you doing Dan?
Daniel Markey: Okay, good morning to you.
Laura Coates: Good, tell me, first of all, this meeting between Modi and Trump and also there was one between Musk and Modi, as I understand. Between Modi and Trump, what were you expecting to come out of the meeting and do you think it lined up with what happened?
Daniel Markey: Well, you know, it was pretty early days. It is pretty early days in the Trump administration, so I don’t think it would be right to expect too much. The main goal here, certainly from India’s side, was actually to try to get out ahead to the extent that they could, of some of what they anticipate, as, you know, Trump’s policies, especially on tariffs and trade, where they have some nerves, because, you know, India historically has very high tariffs of its own. And so, I think they were looking to play a little bit of a charm offensive as mainly a defensive measure to ward off something worse from Washington right at the outset. So, in that respect, I think it was somewhat of a success from India’s perspective. I think the optics were pretty good, and I think they got off to a decent start.
Laura Coates: I recall there was a moment when he did a riff on MAGA and said, you know, make America great again, then make India great again and together with MAGA plus MIGA would be a mega success, and I thought, oh, this is the dad joke, if I’ve ever heard one, but he was very invested in it. There was a lot of applause, at least internally in the room. But let’s talk about what that would actually look like, though. I mean, are the policies of Modi and Trump. Are they complementary to one another? Are there some hurdles need to overcome for a successful diplomatic relationship?
Daniel Markey: Well, you know, there’s huge potential in India. You know, it’s a huge market, one and a half billion people. It’s growing pretty rapidly by global standards. There’s certainly a desire, you’re right on India’s side, to make India great again. That is to build out its economy, and to do so with help from the United States, with technology and all kinds of connections there. So there’s lots of potential. The problem is, potential is not reality, and India has struggled to enact its own reforms, to open up its own market in ways that would make it accessible to U.S. businesses, and that continues to be a problem. We’ll see if pressure from Trump in the form of our own tariffs might, you know, drive a wedge open into the Indian market and actually turn these potentials into reality, but it’s, you know, it’s going to take some time.
Laura Coates: What about the issue of those tariffs and bilateral trade balance? I know you touched on this, but Modi’s team seemed to clearly appreciate Trump’s focus on such, and took some preemptive steps to address those issues in ways that would show some goodwill from the outset. In what way?
Daniel Markey: Well, so Modi came to town having already cut a few of the more egregiously leveled tariffs in India. You know, 150% on various goods, things like that, as they described it in India, this was intended to be something of a preemptive gift to Washington. So that’s a good first step, but average tariffs across the board in India are high. Something around 10% is hard to crack into the Indian market, not just because of their tariffs, but because of other protection that they have in place. Regulations and things and the bureaucracy in India is difficult to crack as well. So, there’s a lot more that has to be done. Both sides have said that they want to have some kind of a trade deal negotiated before the end of 2025. So, you know, they basically signaled that they want to do a lot more haggling, a lot more negotiating, and we’ll see if they can pull that off. But the first step will be to see whether India can do anything before the reciprocal tariffs come in in a couple of months, and there I’m less optimistic. I think it’s going to be hard for them to weather that immediate storm, but I’m sure they’ll give it a shot.
Laura Coates: Are there any dangers of setbacks between the U.S. and India’s relationship and this new administration?
Daniel Markey: Well, there’s always dangers. I mean, one of the things that India worries about actually, which may sound a bit odd to some audiences in the United States, they worry that the United States will actually reverse course on our competition with China. So, they’re concerned that the United States and China may come to some kind of a grand bargain in which they sometimes describe it as a “G2”, so U.S. and China, kind of divvying up the world in which case, India would be kind of left out in the cold. I don’t think this is a terribly serious concern. I mean, that’s my perspective. But definitely as Trump seeks to negotiate with other countries and China, first and foremost, India is going to be watching very closely to see how that affects their interests. There are some other differences, too, lesser issues. Certainly, India has been on a different side with respect to Iran. Has long had a good relationship with Iran, so there will be some frictions there. But by and large, I think the direction the Trump administration is taking, particularly on Russia, will be music to India’s ears. India has a long and deep relationship with Russia and would prefer to see the United States and Russia get along better. So that’ll be something they’ll be watching with some optimism.
Laura Coates: What are the risks of that happening? I mean, are they going to be toning down their independent positions on Russia or Iran, for example?
Daniel Markey: Well, I think India, actually, on Iran, has already kind of pivoted a bit. You know, as I say, India has long historic relations with Iran, but they’ve recently built-up closer ties with Israel and with the Gulf states like Saudi Arabia and so there, President Trump and Prime Minister Modi were talking about this grand scheme called IMEC, (India-Middle East-Europe Economic Corridor). A desire to build out connectivity from India all the way to Europe and including across Israel. So, there are ways that India will kind of pivot and rebalance a bit, given us pressures, especially with respect to Iran.
Laura Coates: A better United States-India trade relationship, would that be better for a better security relationship? What would that impact for us?
Daniel Markey: Sure, one of the things that the United States, and certainly President Trump has said, we want to sell more of our weapons to India, and of course, that would affect the trade balance. We’d be selling more and that would be something Trump would like, but it would also mean that India would be incorporating more U.S. built weapons systems into its own arsenal. Right now, India has a lot of Russian equipment, fair amount of French and other Europeans, some Israeli and some U.S. equipment. So more U.S. equipment would actually make it easier for the Indians in the United States to cooperate and to train together and potentially to undertake joint missions in the future. So yes, to some extent, trade and defense, sales and technology exchanges could all go hand in hand.
Laura Coates: Which countries are going to be most impacted, perhaps unexpectedly, by a strengthened U.S.-India relationship, or a weakened one, frankly?
Daniel Markey: Well, look countries that are worried about this. Clearly, Pakistan, one of India’s historic adversaries and its neighbor, Pakistan, historically had a better relationship with the United States. Now is kind of tilting more toward China and sees the U.S.-India relationship as potentially dangerous and worrisome to its own interests. But China too also. I talked about India being nervous that the United States and China may warm together. Well, China is nervous the United States and India will come closer together and has been watching that closely and even announced during you know, this past week that any arrangements between the United States and India should not be directed at some third country, and by that they mean directed against China. So you know, China and Pakistan are watching this very closely.
source : usip