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Weekend Reads
The United States and India are set to resume trade negotiations—with significant implications for America’s economic competition against China.
In a Hudson policy memo, Aparna Pande and Bill Drexel identify crucial issues Washington and New Delhi need to address to reach a mutually beneficial deal. Key takeaways are below.
Key Insights
1. India is a crucial partner for the US in its competition against China.
India boasts the world’s fifth-largest economy and is the United States’ tenth-largest trading partner. It also maintains a military larger than Russia’s, with military expenditures higher than those of South Korea and Australia combined. Walking away from closer ties with India could be a mistake the US would regret.
2. If cooler heads prevail, the relationship can come back from the brink.
India could signal its willingness to embrace targeted tariff reductions or to ease select non‑tariff barriers in sectors with low domestic sensitivity, while Washington might temper its demands on agricultural products in exchange for visible outcomes in other sectors.
3. Optics matter.
President Donald Trump is comfortable with dramatic and unexpected turns in relationships. A grand turnaround after a nosedive in negotiations would not be out of character for him. Likewise, the president’s strong preference for personal relationships with his counterparts suggests that Prime Minister Modi could directly engage with him to accelerate progress toward an agreement.
Go Deeper
“Decades of friendship and goodwill between the world’s two largest democracies provide a solid basis to move past the current turbulence,” write Nikki R. Haley and Bill Drexel.
On What Really Matters, Walter Russell Mead explained the diplomatic and political reasons Prime Minister Modi appeared publicly with Chinese President Xi Jinping: to demonstrate resolve to both President Trump and the Indian electorate.
Unlike most American allies, India views itself as an equal partner to the US. Washington should take this into consideration, writes Aparna Pande.
