After remarks on the India-Pakistan ceasefire, trade and on Kashmir, US President Donald Trump has claimed that he spoke with Apple CEO Tim Cook and asked him not to expand Apple’s production in India.
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00:00Let's raise the big questions right at the very outset again.
00:03Is the US President Donald Trump using trade as a weapon to arm twist India?
00:08Trump Modi Bonhomi is that now under scanner?
00:11Should India ignore Trump's remarks?
00:14Is Trump's politics all about business first?
00:17Joining me now is Surjit Bhalla, who till not long ago was India's Executive Director
00:21at the International Monetary Front and has been someone who's tracked the Indian economy
00:26for decades.
00:26Javed Ashraf is a former diplomat, has served in several global capitals.
00:31Siddharth Zarabi is Editor of Business today.
00:33I appreciate all of you joining us.
00:34Dr. Bhalla, I want to come to you first.
00:36How do you respond to when Donald Trump says, and we discussed this a few weeks ago when
00:41we did a roundtable on this, that he seems to suggest to American businessmen, don't
00:45go to India, first put all your money in America.
00:49And he's now telling that to the Apple CEO.
00:52How do we see this?
00:53Isn't this Trump just resorting to optics or something more?
01:01Well, by now we should be, you correctly called it, optics.
01:05And by now we should be getting, all of us around the world, should be getting used to
01:10Trump.
01:10And, you know, he changes his story and everybody accepts that he'll change the story.
01:18So, not so long ago, he had said how India and Pakistan were engaged in a 1500 war, 1500
01:26years war.
01:26So, I think, you know, this is part of the, I don't know whether we call it show or showmanship
01:33or brinksmanship or negotiation.
01:37But isn't there a, but if I may stop you, Dr. Bhalla, isn't there a method in the madness?
01:41Because Trump is pushing the idea of make America great again and India wants to do make in
01:46India.
01:47Somewhere this was bound to conflict.
01:48Are those conflicts coming out in the open ahead of the big trade talks that will take
01:53place this weekend?
01:54Yeah.
01:55Okay.
01:55I happen to disagree with that point.
01:57But that point would be very valid if we were discussing China and the US.
02:03So, both US and India have been affected by Chinese mercantilism, which is dominating world
02:13trade, especially world manufactured exports.
02:17Indeed, there might be some who say that the India-Pakistan war should really be called the
02:23China's India-Pakistan war.
02:26You should always look at economic events, political events from the lens of who gains
02:33the most.
02:34Now, clearly, China gains the most if there's friction between India and the US.
02:42Because, as you just discussed about him telling the Apple CEO that, look, don't move to India
02:50when for, I think, a couple of years, there's been a big campaign from all sides.
02:56Whether it is from Bush or from, whether it is from Biden or from Trump, about expanding
03:05into India.
03:07So, suddenly, you know, it was all fine until about two, three weeks ago.
03:12And the China-India-Pakistan event blew up.
03:17So, I look at it from the lens of who benefits the most.
03:21It is China that is benefiting the most.
03:24And therefore, just have that perspective.
03:28Same perspective applies to US-China talks.
03:32In terms of China is nothing to lose.
03:36And US on manufacturing, I'll come to precisely that point, that US manufacturing has been hurt
03:44by China's mercantilism.
03:48India's manufacturing has been hurt by China's mercantilism.
03:52Talk to any Indian industrialist.
03:54And the first thing, they won't complain about the US.
03:58But they will complain, and rightly so, about dumping from China.
04:02So, I think that's the perspective one should have.
04:06And just like, you know, in the final analysis, in the final conclusion, it will be the case
04:16that US and India will reach a trade deal.
04:21As Jaishankar said, this has been going on for quite some time.
04:24And I believe the trade deal would be very much to the benefit of India and to the benefit
04:30of the US.
04:31That's why it's a deal.
04:33Okay.
04:34Let me bring in Siddharth Zarabi for a moment, just to understand the aspects of this trade
04:39deal for our viewers.
04:41Siddharth, you just heard Surjit Balla talking about a win-win deal.
04:44Is it a win-win deal?
04:46Or is Trump, therefore, just squeezing India, arm-twisting India ahead of the deal?
04:50When he says, for example, publicly, that India has already agreed to several good zero
04:54tariffs, what is Trump doing?
04:57Well, this is another episode of Trumponomics.
05:01And there is anything economic in this argument.
05:05The biggest U-turn that President Trump has made is with China.
05:09And between this bluff and bluster, Indian officials and the political establishment are keeping
05:16very calm and seen through it.
05:18What is likely to happen, Rajdeep?
05:21We know that Commerce Minister Piyush Goyal and our designated negotiator, the Special
05:27Secretary of Commerce, are set to leave for the United States practically in a few hours.
05:33It's a four-day visit where the actual substance of the talks will happen.
05:38You are absolutely right.
05:39If the president of a nation which is going around the world seeking to renegotiate the
05:44global trade order of the last 40 years is going to cause political embarrassment to
05:51a visiting country by saying that they have promised to drop tariffs to zero, that will
05:56never happen.
05:57He could dream.
05:58He could become the president of the United States 20 times.
06:01We don't care.
06:02That is never going to happen.
06:03It will never be zero, never, ever on agriculture, on goods, or on services.
06:10The facts that President Trump is possibly given by his officials, very, very disappointing.
06:16He says number 30th for exports.
06:18We are the fourth.
06:19We are the fourth largest after Russia and China and one more.
06:23Every single statement in the last few days particularly, and I will end by saying, Rajdeep, you've
06:31been longer tracking global developments.
06:35Have you ever heard the president of the United States try and defuse a potential conflict of
06:42the highest order by bringing in trade?
06:44Do you think India will sort of agree to peace with Pakistan for trade?
06:51I mean, I don't know what he is being said in his daily briefing notes, Rajdeep.
06:56That's Trump, you know, Trump likes to shoot off the hip.
07:00But Javed Ashraf, this poses a peculiar challenge, doesn't it, to Indian diplomacy?
07:04That you're dealing with a president who day by day makes on record statements that are
07:08embarrassing.
07:09We can start with the fact that he virtually went on Truth Social, the social media site
07:14to announce the ceasefire, then claimed he was ready to settle the thousand year Kashmir dispute,
07:20then linked it to trade, now says Apple doesn't need to build in India for the world, only
07:27build for India.
07:29Are we, is Indian diplomacy faced with a rare challenge in how do you respond to Trump or
07:34do you not respond to him at all and allow the surround sound, the noise to take over?
07:40Rajdeep, I think government has clarified its position as clearly as it can in a very measured,
07:47factual, factual, professional tone.
07:49I don't think we have to match President Trump's rhetoric and take this into a different domain.
07:57We are very clear.
07:58And I wanted to particularly bring in some elements of history into this.
08:03You know, there is no way there can ever be either a third party mediation in India,
08:09Pakistan issues or any linkage between this issue or trade or any other geopolitical issues
08:18between India and the United States.
08:21And, you know, first of all, I want to point out, despite all the noise that is made in
08:25my experience, and I've dealt with this with the United States from 1999 onwards for more
08:30than a decade, that this was perhaps the most minimal level of intervention or involvement
08:38of the United States in this conflict.
08:41I mean, you would recall, I do recall, 99, there was such fanatic movement between Islamabad
08:48and Delhi and conversations.
08:50Same thing in 2002.
08:52And there was this continuous, breathless sort of shuttle diplomacy going on at that point
08:58of time, U.S. needed Pakistan for the sake of the war in Afghanistan.
09:03There was some pressure on us, but we didn't relent at all.
09:07In fact, we changed the agenda to the dual-use technology, space, nuclear cooperation.
09:12And that is what eventually led to the defense framework, the NSSP, and eventually the 2008
09:17nuclear agreement.
09:18Similarly, when Obama came right after the Mumbai terror attack, he, if you recall that interview
09:24he gave to Time in October 2008, that the road to peace in Afghanistan lies through Islamabad
09:32in Delhi, and he wanted to make Holbrook a special envoy for all three countries.
09:37We told him this is the kiss of death for the relationship.
09:41He backed off.
09:42And when he came in 2010, we had already moved on to some very important issues, including
09:47trade.
09:47Many of those trade issues still continue to persist.
09:50But we had also, remember, in 2010, got the first endorsement for India's permanent membership
09:55of the UN Security Council, as also a U.S. endorsement for India's membership of the four
10:02export control regimes, besides the fact that we discussed CLND and civil nuclear cooperation.
10:09So this has been the pattern.
10:10I think what we are going to do is to convey clearly, and in no uncertain term, that India-Pakistan
10:19issues are bilateral.
10:20You remember what late Jaswant Singh said, we are two countries that speak the same language.
10:25We don't need an interpreter.
10:27And that position still holds, as Dr. Jai Shankar, our external affairs minister, said, there
10:32is a national consensus on this issue.
10:34Yeah, but that was, Javed, with due regard, that was a pre-Trump era.
10:37I mean, Javed, we are now dealing with someone, and if we don't have a dialogue with each other,
10:42we say we want to have a bilateral dialogue, but there is no bilateral dialogue.
10:46And you've got Donald Trump, who's a dealmaker.
10:48We want to come to this.
10:48So for both countries, it's important not to be distracted by these issues, because we
10:55have a very broad arranging agenda.
10:58We've got trade, and there will be discussions beyond what is being said publicly.
11:03It's a complicated, complex set of issues.
11:05So we will be working towards a trade deal.
11:10We will have issues relating to energy.
11:12There is from civil nuclear energy to hydrogen to renewables to fossil fuel.
11:18We have technology, industries of the future, where we need to work with the United States.
11:22And we are in semiconductors and critical minerals and clean energy, and in force and
11:27defense technologies as well, where, of course, I would like to point out that we will have
11:31certain limitations and restrictions because of sovereignty and strategic autonomy issues
11:36and the nature of technology transfers.
11:38But both countries have a very broad range of issues to discuss.
11:42We'll let this noise settle down, and then we will move forward.
11:45So you're saying we are at a completely different level to Pakistan.
11:50Am I correct?
11:50Net-net.
11:51The United States does see us at a completely different level to Pakistan in your view.
11:56It has always been the case, and I wrote about it before this war started, that whenever
12:01there is this terror attack and the prospect of a conflict, three things inevitably happen.
12:07Number one, that the attention shifts from terrorism to prevention of conflict.
12:13Second, it is always put in the context of the longstanding issue of Jammu and Kashmir or
12:19the dispute between India and Pakistan.
12:21Third, there is a tendency to then equate India and Pakistan and the aggressor and the victim
12:26in this particular situation.
12:29But it's always been the case.
12:31But this is a short-term situation that soon yields to the broader, longer-term objectives
12:39of the two countries.
12:41And during the course of these 25 years of this extraordinary transformation of India-United
12:46States relationship, we have seen moments where we've been distracted by the Pakistan
12:51issue, but we have been able to navigate past it, focus on our broader agenda.
12:56And I think what is important for us is not so much on whether we will move forward, but
13:02what is important for us to understand is what exactly do we want from the United States?
13:08What exactly can the two countries do?
13:10Sometimes I think we invest much into it and sometimes too little into it.
13:15So once we have that clarity on how the United States can play a role in India's transformation,
13:21and I have a...
13:22Let me take that, Javed, stop you and take that to Surjit Bhalla.
13:25The role that India can play in the US is...
13:28The role US can play in India's transformation.
13:31You were with the IMF for a couple of years.
13:35There's been a lot of criticism, of course, of the IMF that the loan to Pakistan has once
13:39again been extended.
13:41But that apart, the United States' role.
13:44Do you see Trump having any clear vision for India beyond seeing India as another business
13:49opportunity?
13:50You see, he seems to, as we've seen in his trip in the Gulf and the Middle East, he's
13:55putting business above peace.
13:56He wants business above all else.
14:00Peace through business, rather.
14:01Within the optics that Trump wants to achieve at a particular point in time.
14:10And right now, he wants to achieve the optics of, he's upset that India sort of questioned
14:18his role in the peace agreement or in the stoppage of the war.
14:26So I think, in my view, that is understood by everybody.
14:32So that's why I call it optics.
14:34I have no doubt, and given what has been going on, especially over the last 20 years or so,
14:43between starting from the nuclear treaty or nuclear agreement with the US, that India and US
14:52have so many similarities have so many similarities, and they, whether you want to call it comradeship
14:59or a union of those two, democracies, we've all talked about it all the time.
15:07None of it has gone away.
15:09I do think the next decade, as the last five to 10 years, will be marked by a very strong
15:20relationship between India and the US.
15:24In four years or three years, Trump won't be there.
15:27But, you know, this bond or this geopolitical-inspired relationship, you look at the context, geopolitical
15:37context in the world, this is a surefire deal.
15:42Now, I may be wrong.
15:43It's a forecast.
15:45But I really think the juxtaposition of all the events and all the fundamentals are suggesting
15:53that this will be the defining international relationship.
15:58Now, we're just coming off, Trump making the statement, no deal, India has offered zero tariffs,
16:05and all of that.
16:06And, you know, any economists that I talk to, and even non-economists, even foreign service
16:12officers, et cetera, they, you know, politely brush that aside.
16:17That really amounts to much ado about nothing noise.
16:24And that's how it is.
16:25You know, this is international.
16:27But, you know, you're saying that.
16:29You know, you're saying that, but I just want to push maybe Javed for a moment on that.
16:36There is an asymmetry of power.
16:39You see, Surjit Bhala says the next decade will be a defining decade for the Indo-US relationship.
16:43But there is an asymmetry of power between India and the U.S.
16:47And the United States, therefore, will push hard on the negotiating table when it comes
16:51to trade talks.
16:52And they will push us, as they also perhaps did, in ensuring that there was a ceasefire,
16:57if I may be allowed to use that word, between India and Pakistan.
17:00They have that leverage, in a sense, with both Islamabad and New Delhi.
17:06No, first of all, again, I'd like to reiterate that it's fundamental, as between two human
17:11beings, you cannot force two parties, two countries, to come to any conclusion if they
17:17don't want to.
17:18And I don't think that whatever President Trump may say or insist upon repeatedly, that
17:24was the case.
17:25I've seen this in even more difficult times than this, that we did not relent or bow to
17:32the U.S. pressure on this particular issue.
17:35And so I say this not simply because of what the government is saying, because I've also
17:39seen this in the context of my relationship.
17:42Second, yes, there is asymmetry of power.
17:45And I do not believe in the hyperbole with due respect to anything being a defining partnership
17:51of the 21st century.
17:53These are good for joint statements.
17:55We are living in a very fluid and uncertain world.
17:58We have left the old international order behind.
18:01We are not yet certain what we are getting into.
18:03There will be a complex set of simultaneous equations which will be playing themselves
18:10out.
18:11U.S.-India relationship will be one of those relationships.
18:14We have other options.
18:15Asymmetry of power does not necessarily mean asymmetry of negotiations.
18:20And ultimately, it is about how we define our interests, how we look at the short term and
18:25the medium and the long term.
18:27And I think that's where we have to be confident that despite all the pressures, we will have
18:35to be very careful that we do not do things that are irreversible or irretrievable, but that
18:40we reach an agreement that is a fair balance of interests.
18:45And I think, remember once again, asymmetry of power is not an asymmetry of negotiating skills.
18:51We are also a country with an independent, sovereign DNA with a great sense of strategic autonomy.
18:57And we will also play our cards accordingly.
19:01You know, Siddharth Zarabi, you've been tracking those negotiations.
19:06Do you believe that the deal is in the offing by July, August or by August being the deadline?
19:13Do you believe the deal is in the offing or is the Indian side under increasing pressure to meet
19:18that deadline?
19:20There is no pressure on the Indian side.
19:22We have earlier today, just literally hours ago, heard from senior officials that India
19:28is now hoping for a bilateral trade agreement.
19:33And that's nuanced slightly differently from a free trade agreement by fall this year.
19:38What seems to have set of concerns is the back and forth, including a comment by the U.S.
19:45Commerce Secretary that it will take time.
19:47As far as India was concerned, there was never a quick fire deal in the offing.
19:53We did not go into this negotiation for a quick gun, murugan kind of agreement.
20:00That's not the way trade negotiations happen in India.
20:03It may take a few more months.
20:05Certainly, the waters have been muddied.
20:07But I just want to add one comment.
20:09What's the downside of things not panning out with the U.S.?
20:13From an Indian perspective, we are concerned with our economy.
20:16There's a trade surplus roughly of $46 billion, Rajdi, that we enjoy.
20:23If you look at the export basket, it's a certain kind of export basket.
20:28Maybe a U.S. can replace us with sources somewhere else.
20:32However, even if we were to lose $10 billion, $20 billion of that surplus, we have already started to diversify our trade relationships.
20:43After roughly a decade of looking the other way, we now have an early agreement with the United Kingdom.
20:49We are working double time on many other negotiations.
20:53So, it's not as if all our trading eggs are in Mr. Trump's basket.
20:59That is certainly not the case.
21:01We have plenty of options.
21:03And you will see Indian trade negotiations and the political establishment playing hardball of the kind that Mr. Trump is perhaps not used to these days.
21:14Interesting.
21:15Siddharth Zarabi, Javed Ashraf, and Surjit Balla, I think all three of you have shown, you know, amidst all the noise,
21:22it's nice to hear three articulate voices trying to cut through the noise and decode exactly how the Trump-Modi equations might affect trade
21:32and, of course, the widest sphere of Indo-U.S. diplomacy.
21:36I appreciate you all taking the time off to join me here tonight at the top of the news.
21:40Thank you so much to all three of you.