Rahul Gandhi’s flawed rhetoric on India-US trade deal


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United States President Donald Trump uses tactical coercion to extract concessions from trading partners but will compromise when met with unblinking firmness.The White House revealed that trait when it edited its earlier fact sheet on the interim India-US trade deal within 24 hours, accepting India’s concerns on pulses, digital technology and agriculture. It also changed the wording from “committed” to “intend” in a critical clause on India buying US goods and services valued at $500 billion.Leader of Opposition (LoP) Rahul Gandhi regards $500 billion as an impossibly high target for India to meet over five years. It therefore constitutes a “surrender” to the US.It is not. India is already buying over $100 billion worth of US goods and services every year. The value of Boeing passenger aircraft currently on order by Indian airlines is over $80 billion.Defence equipment over the next five years, including large numbers of SkyGuardian hunter-killer drones and Apache attack helicopters, will add substantial value to the targeted amount. Increasing purchase of crude oil from the US at two million barrels a day will (at $65 per barrel) contribute $130 million per day or over $48 billion a year. Gas and other US energy products, including equipment under India’s newly reformed nuclear power reactor legislation can significantly boost that number.The likelihood of importing up to $150 billion a year and thereby exceeding the $500 billion target over five years is so self-evident that Rahul Gandhi has either not fully understood this empirical evidence or chosen deliberately not to.What Indian Opposition MPs do not see, or do not want to see, is obvious to Americans, including US Trade Representative Jamieson Greer. He said recently in a television interview: “The India-US deal will be a very important one that will reverberate for years to come.” He added that India could be “an alternative to China for American companies looking to diversify their production.”Greer elaborated in the TV interview: “We know that many companies already are going in that direction. We want the supply chains to be here in the US and as close to home as possible. We know there’s a process when you are shifting from globalisation and the challenges that are present to our country when you are shifting to a more resilient and secure economy. At some point, you have to shift supply chains around, India can be a waystation for that. They have a lot of folks there, and manufacturing capacity. India can be a good source as long as it is balanced and it is fair.”As LoP, Rahul Gandhi’s views are at odds not only with those of US trade authorities but also of Indian exporters. For example, textile exporters say that the conditional tariff exemption Bangladesh has secured from the US for its garment exports will not hurt Indian textile exports. Premal H Udani, chairman and managing director of Kaytee Corporation, a major textile exporter, told The Times of India on February 11: “The exemption from reciprocal tariffs for Bangladesh-made garments using US cotton and man-made fibre is unlikely to provide a major edge as it will involve transportation cost and the spinning industry in and around Dhaka is not very competitive. It was struggling until a few months ago. A large part of the global trade uses manmade fibre. So, we do not have much reason to worry.”Others in the apparel business are equally upbeat. A Sakthivel, chairman of the Apparel Export Promotion Council (AEPC), says: “There is nothing to worry. We have got a good deal from the US. In fact for India, cotton for re-export can be considered for concessions if there is a 20% value addition.”Trade body GTRI (Global Trade Research Initiative) added what Opposition leaders in Parliament need to hear: “In practical terms, a Bangladeshi garment that normally faces a 12% US MFN tariff would attract a total duty of 31% (12% MFN+19%). For India, the comparable total would be about 30% (12% MFN + 18% reciprocal). But Bangladeshi garments made with US fibres would avoid the reciprocal duty, paying just 12% MFN tariff. While this appears to be a significant concession, Bangladesh’s export structure and its heavy dependence on non-US textile inputs means the arrangement is likely to result in only a limited increase in garment exports to the US.”Let us rewind to where we started. The principal rhetorical error made by Rahul Gandhi and Thiruvanthapuram MP Shashi Tharoor (with whom the LoP has reached a modus vivendi, keeping the forthcoming Kerala assembly election in mind) is not fully acknowledging the mercurial nature of Trump.The US president has frequently insulted long-term allies like Canada, Denmark, the European Union and South Korea. With India he has been notably circumspect, often laudatory even during the fraught six months when US tariffs were over 50 per cent.In his latest salvo against Canada, for example, Trump threatened to block a new bridge between Detroit and Canada. He raged on his social media platform TruthSocial: “I will not allow this bridge to open until the US is fully compensated for everything we have given them, and also, importantly, Canada treats the US with the Fairness and Respect that we deserve.”When negotiating trade deals with a maverick leader like Trump, firmness and patience are virtues that deliver good outcomes for India. Rahul Gandhi and his acolytes, with their theatrics in Parliament, could sully those outcomes.



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