What are the broader geopolitical factors influencing India's trade discussions with the U.S.?

What are the broader geopolitical factors influencing India's trade discussions with the U.S.?

 

The broader geopolitical factors influencing India's trade discussions with the U.S. primarily revolve around two key areas: the U.S.'s general trade posture towards other nations and the geopolitical instability in the Middle East stemming from Iran-U.S. tensions.

 

•U.S. Global Trade Policy and India's Negotiating Stance: India's negotiation strategy with the U.S. is influenced by the understanding that the U.S. is not actively signing elaborate trade deals with many other countries. This particular context allows India to approach the negotiations, including the July 9 tariff deadline, without "desperation". Even if the deadline is missed and tariffs revert to April 2 levels, India believes it won't be hurt more than other nations, as it is one of the few countries negotiating such an elaborate trade deal with the U.S.. This broader U.S. trade policy environment allows India to prioritize sensitive domestic sectors, such as agriculture and dairy, over rushing to meet a deadline.

 

•Geopolitical Instability in the Middle East (Iran): The situation unfolding in Iran, specifically Iran attacking U.S. bases in Syria, is considered "more serious" and has prompted the Indian government to increase its vigilance on the potential impact this would have on trade. This geopolitical event directly impacts India's trade logistics and costs, as while alternative routes to the Strait of Hormuz exist, using them "will also raise costs as it will increase the time for shipment of goods". Such increased costs and transit times for maritime trade routes represent a significant external factor that could influence India's overall trade considerations and strategic economic planning, even as it engages in bilateral trade discussions with the U.S.