Opportunity given by Trump
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Prime Minister Narendra Modi's visits to Japan and China are significant in the context of the impact of the tariffs and penalties imposed by the United States against India on our economy. It is also being viewed as a way to find a solution to the perception that India is being isolated globally. The current moves can be beneficial on both the economic and diplomatic front. The US court's ruling (even if upheld by the US Supreme Court) that most of the tariffs imposed by Donald Trump on foreign countries are illegal is of little comfort. Because Trump's commitment to his whims is stronger than his commitment to the law. He is one of those dictators who do not hesitate to use loopholes in the law to implement their own interests and racial discrimination. We have already taken some good steps to overcome the impacts of the additional tariffs. One of them is the decision to increase domestic consumption in view of the huge decline in exports. The government thinks, and rightly so that this can be achieved to some extent by reforming the structure of the Goods and Services Tax (GST). The reduction of four tax rates (5, 12, 18, 28 per cent each) to two (5, 18) can give a boost to the trade sector during the Diwali season. It is also expected that the Union government will take note that ignoring the demands of the states in the GST share can backfire as well.
The energy sector is a crucial one in the world economy today. Despite Trump's anger towards India for buying Russian oil, India's 'tight rope walking' policy, without causing further provocation, is an appropriate and practical policy in the current situation. This will be so as long as there is co-dependency in the energy sector. However, the serious mistake is that the price discount to be obtained through Russian oil benefits corporations, not the people, and this must be corrected. In this sector, too, relying heavily on a single source is not desirable. Here, we need to strengthen international relations by considering the common interests of the people. There is an argument that it is not right to improve relations with China at this time. Critics say that the Prime Minister's visit to China, when our territory is encroached upon, will send the wrong message. However, we can improve diplomatic relations without softening our stance. Closeness with neighbouring countries is especially important. It would be helpful to resolve issues such as land grabbing in a healthy manner and ro adopt a wise, rather than an emotional approach. India's stance is that the door to talks is open even though Trump shows no signs of easing up. It needs to be able to continue trade talks with the US even as it approaches countries like China and Russia to counter US pressure. America needs the Indian market just as India needs America. The reason behind imposing tariffs on India which are not imposed on China or Turkey, which buy Russian oil, has not been made public.
In any case, over-dependence on America, China or Russia is bad. (Remember our Foreign Minister once spoke as if we were afraid of China - “They are a stronger economy than us,” was how Jayashankar justified inaction) Similarly, it is not right to antagonise other countries through unnecessary provocations. It is rational to use the means of consultation and discussion as much as possible. We can also say that in that sense Trump's crazy actions are beneficial to us. They have created an opportunity to recognize our mistakes, correct our policies, and expand international relations without limiting them to a few big power countries.
