I have dealt with trade matters for 20 out of the 41 years of my career in the civil service—as an actual trader in two state government trading enterprises, as chairman of a commodity board and in the commerce ministry—both in India and abroad.
I have been ambassador of India to the World Trade Organization, the premier global institution for multilateral trade tasked with setting and enforcing trade rules.
I have negotiated with the US on multiple occasions. Never have I found them offensive in any manner. Even when the US Food and Drug Administration put Indian black pepper under ‘automatic detention’—which meant that all consignments had to be inspected and approved by an American laboratory after the shipments reached the US, thus adding to costs and making us less competitive in comparison with other producing countries—our delegation was received with courtesy.
They still retained a strong position on the quality of the pepper we exported, but listened to us with respect.
We took this as an opportunity to raise the quality of our product, both in farmyards and in processing units and storage godowns. When a US FDA representative visited us later, we showed him all that we had done to improve quality, and the stipulation of automatic detention at American ports was lifted.
The great lessons that this episode taught me were the ability of our exporters and farmers to adapt quickly, and the manner in which the US FDA responded when they were convinced we were serious in setting our own house in order.
A few years later, as India’s ambassador to the WTO, I often clashed with the US representative while negotiating several components of the Doha work programme.
What impressed me most about the American negotiators was their unfailing courtesy, even while they were adamantly and patiently reiterating their position endlessly. I was also impressed by the immense energy they showed in the negotiations, hour after hour, day after day, the information they possessed and their enormous negotiating skills.
Indeed, the US ambassador in Geneva was one of my close friends even while we were constrained to cross swords repeatedly. At this time, too, there was a Republican President, George W Bush Jr.
It is, therefore, with consternation that I watch the present-day US negotiators insulting India and our political leadership without remorse. After many years of dealing with India, the US knows that we have specific red lines that are impossible for us to cross. They know that we have vast hordes of indigent farmers, eking out a precarious existence, depending largely on the rain gods for their crop each year.
Where we could make compromises, we have been accommodating. Almonds, pistachios, soya beans and soya bean oil flow into the country from the US with low tariffs. After years and years of negotiation with India, they must be very clear that we cannot allow imports of rice, wheat, and other crops on which our poor farmers subsist. It is not that we are stubborn in our negotiation. No political leadership in India can abandon our farmers to please the US or, for that matter, any other country.
It is, therefore, highly disconcerting for me to watch the deterioration in the standards always maintained in negotiations by the US. It can always be said that Trump is quixotic and can leap from one extreme to the other. We can also put up with crass remarks like Trump’s statement that the countries of the world are lining up to “lick his a**”. Indeed, many nations joyfully did exactly that after he made this asinine statement.
It is not only Trump who has insulted India. Trump coats all his coarse statements about India with fulsome praise for Prime Minister Narendra Modi. Meanwhile, White House trade advisor Peter Navarro has called India “the Kremlin’s laundromat” and the Russia-Ukraine conflict “Modi’s war”.
Howard Lutnick, the US commerce secretary, has said, “In a month or two months, I think India is going to be at the table and they’re going to say they’re sorry and they’re going to try to make a deal with Donald Trump.” To ingratiate with Trump, his ministers and advisers are falling over one another to belittle India.
India has responded with impressive maturity and sobriety. Despite the imposition of an extra 25 percent tariff on India for buying crude oil from Russia, our response has been measured and calculated. We have never hit out at the US the way Brazil’s President Lula da Silva did. The tariffs on Brazil, levied because Trump’s friend, former President Jair Bolsonaro, was in legal trouble in a court of law, led Lula to say that he would not take orders from a “gringo”.
He went on to say, “In politics between two states, the will of neither should prevail. We always need to find the middle ground. This is achieved not by puffing out your chest and shouting about things you cannot deliver, nor by bowing your head and simply saying ‘amen’ to whatever the United States wants.”
He also announced a BRL 20-billion bailout package for affected exporters.
On the other hand, Modi and his ministers have been remarkably restrained, and Trump has been forced to proclaim his love for Modi every other day.
India has been quietly strengthening ties with Russia and China at the SCO in Tianjin; exploring new markets; making a belated bid to leverage our real trump card, our immense domestic market through measures such as rationalising GST rates, expanding middle class spending capacity through more liberal income tax slabs and by lowering bank rates; and endeavouring to move away from dollar-denominated foreign trade through bank-led special Vostro arrangements and by working with BRICS at its forthcoming meeting.
The clock is ticking for the US. The next move has to be made by them. At the same time, the Trump tariffs are a wakeup call for India to diversify trade, work with others to strengthen multilateral institutions, separate trade from international politics and overhaul our negotiating machinery to make it as potent and as informed as the office of the US trade representative. Trump’s taunt can turn into a massive opportunity for us.
K M Chandrasekhar | Former Cabinet Secretary and author of As Good as My Word: A Memoir
(Views are personal)
(kmchandrasekhar@gmail.com)