Two decades ago, the idea of a trade deal between India and the US seemed pure fantasy. After all, the divide between the two on tariffs, standards and double standards, to be mischievous, seemed irreconcilable. Two decades, however, is a significant period in economic development — and an eternity in politics. Today, change is so rapid that what looked impractical just yesterday appeared to be within the realm of possibility. Or so it seemed.

How did we even get here? India’s recent shift in trade diplomacy, moving from a cautious approach to actively pursuing free trade agreements, reflects a strategic imperative to diversify trade partnerships and enhance its position in global supply chains. It is also a reflection of the need to explore alternatives to trade liberalisation, albeit guardedly, to the multilateral system, currently in an extended coma. This pivot is therefore driven by self-interest, the desire to expand exports, attract investment and counter potential geopolitical headwinds.

For President Donald Trump, trade diplomacy is the equivalent of levying punitive import tariffs on those countries that he believes have free-ridden on the open US market for decades. The script aimed at the MAGA constituency is irresistible: Use tariffs as a negotiating tool to extract concessions from “errant” trading partners, bump up government revenues, reduce, or better, eliminate trade deficits and bring manufacturing back home to America. The fact that none of this, except strong-arming the EU, Japan, Vietnam, Indonesia, South Korea and perhaps India into concessions, will work does not........

© Indian Express