Former Ambassador to the US Meera Shankar, speaking to CNBC-TV18, highlighted the need for India to re-establish its strategic partnership on a firmer footing, balancing cooperation with pragmatism.
Shankar highlighted that India is willing to engage constructively on complex topics such as illegal migration but stressed that the approach matters. “India has already said that they will take back illegal migrants, but perhaps they need to point out to President Trump that it becomes more difficult to navigate if it is done as part of high theatre in military aircraft, with people coming in handcuffs,” she said, adding that a more discreet process, as used in the past, would be preferable.
On trade, Trump has repeatedly labelled India as a “tariff king,” citing high duties on American goods. However, former Commerce Secretary Ajay Dua dismissed concerns that tariffs would dominate the upcoming talks. He pointed out that India’s duties on US imports, such as LNG, crude oil, and diamonds, are minimal. “The goods which come to India from the United States are largely at zero or near-zero duties, and certainly not more than 10%,” former Commerce Secretary Ajay Dua stated.
India has already taken steps to preempt potential tariff disputes. The recent budget included reductions in customs duties on high-end goods like luxury cars, solar cells, and chemicals. Dua noted that these moves may have been made in anticipation of Trump’s tariff policies. “The Harley Davidson case is a good example—we reduced duties because it doesn’t impact India significantly. Only a few thousand of those bikes are imported,” he explained.
While trade tensions persist, the broader US-India relationship is set to expand in the defence sector. India’s Defence Secretary has indicated willingness to procure more US defence equipment, aligning with Trump’s focus on strengthening strategic military ties.
Edited excerpt of the discussion:
Q: Donald Trump has been calling India the tariff king. There are conversations within Indian circles about what this might translate into as we head deeper into 2025. What are your thoughts on the tariff overhang in this bilateral conversation between President Donald Trump and Prime Minister Modi?
Dua: I don’t comprehend that tariffs on India would be the central theme when Prime Minister Modi meets President Trump. We are not in that category of high import tariffs, particularly from the United States. The goods which come to India from the United States are primarily LNG, crude oil, diamond that is re-exported back to us after having been worked upon or in raw form, and all those items their duties are either zero or near zero, and certainly not more than 10%. So, the average will be somewhere between zero and 10%. So, when President Trump talked about it well before his swearing-in, he was speaking about the general perception that India protects itself, whether it is for its Atmanirbhar programme, or Make in India.
Q: In the recently concluded budget, we saw multiple tariff lines — whether it’s high-end bikes, high-end luxury cars, solar cells, or chemicals — we saw reduced and rationalised customs that we charge on several of these tariff lines. Is that in anticipation of any action from the United States, and if that’s the trajectory that the Indian government is taking? Can we expect even deeper cuts as we head into 2025 or even in Washington with the Prime Minister meeting Donald Trump?
Dua: Probably yes, the action was in anticipation of any so-called threatening move by President Donald Trump. The Harley Davidson bikes, which is the more prominent one, on that, on that we have relented because it doesn’t make too much of a difference to India because the Harley Davidson bikes cost too much, and there are only 3,000 to 4,000 bikes exported to India. The people who use those bikes can afford to pay a little more duty also; that was our logic earlier. Now, we have brought this down further.
The question is, what are the goods which India exports there? We are not much of an exporter of steel products or aluminium, which, in the last term, President Trump also levied a duty of 25% and 10%, which his successor undid. Now he’s talking about globally levying a duty, not just for India, a duty of 25% on steel.
Q: In this overhang, when we’re looking at issues of deportations, when you’re looking at issues of duties, tariffs being announced by the US President, what to your mind will be the key aspects that you’ll watch for in terms of agendas that India will try to drive home with the US President?
Shankar: India will try to reestablish the strategic partnership on a firmer footing with the new Trump 2.0. I think they will deal pragmatically with some of the issues that could be difficulties in the relationship; for instance, regarding illegal migration, India has already said that they will take back illegal migrants. Still, perhaps they need to point out to President Trump that it becomes more challenging to navigate if it is done as part of high theatre in military aircraft, with people coming in handcuffs, it becomes an internal issue in India. Hence, a more discrete approach, as was the case in the past with chartered aircraft or civilian aircraft, I think works better in Indian conditions. They have to point out that it is something that Trump and the US should also want. After all, if this issue becomes like a political issue with high emotions, it becomes far more difficult for the Indian government to navigate.
Regarding tariffs, the commerce secretary has a statement today that the tariffs on the top 30 goods we import from the US range from zero to 7.5%, so that’s not very high. He also explained tariffs on motorcycles, which are not produced in India. So, it’s not eating into the established domestic market. But I do believe that you need a mixture. You don’t need a mix of complete flexibility in terms of, you know, acceding to everything the US says; you need the ability to hang firm on some issues and to concede on specific problems pragmatically. Otherwise, you see what happens with a country like the US: whatever concessions you give are just pocketed and moved to the next goal post. And you whet the appetite for more.
Watch the accompanying video for the entire conversation.