When Air Force One touches down in India on February 24, there will be modest expectations from US President Donald Trump's visit. Trade is off the table. Apart from tariff changes on Harley Davidson superbikes to appease Trump and agreements on dairy and defence, no major policy announcements are likely.
Trump in town
Most of Trump's time will be swallowed up by the Namaste Trump showstopper in Ahmedabad on February 24 and Trump and First Lady Melania's two-hour trip to the Taj Mahal in Agra before Prime Minister Narendra Modi hosts the American President at a banquet on February 25. And yet much needs to be done by the Modi government to take the India-US relationship to a new level despite key challenges. With a peace deal between the US and the Taliban likely to be signed soon, Afghanistan is a major worry for India.
The return of the Taliban terror group as part of a coalition Afghan government will strengthen Pakistan in its strategic backyard. The Taliban enjoys safe sanctuaries in Pakistan. Trump has refused to send US drones to attack Taliban terrorists on Pakistani soil though US intelligence knows precisely where those Taliban sanctuaries are located. The focus of the Trump-Modi meeting will be defence and energy. India is a major buyer of US military hardware.
It has replaced Iranian crude oil with US shale oil. Defence and energy will deepen the India-US partnership that has floundered in recent months as Trump cosies up to Pakistani Prime Minister Imran Khan. He has offered to mediate on Jammu and Kashmir on four occasions in the past six months. He will not do it on this trip only because his team has coached him not to. Unlike US Congressional and European Union leaders, Trump has no particular opinion on the detention of Kashmiri leaders.
He is himself an advocate of harsh detention of illegal migrants in the US which includes separating young children from their parents and placing them in facilities that resemble detention camps. Following his acquittal by the Senate on impeachment charges, Trump is enjoying a spike in opinion polls. With the Democrats in disarray. Trump's reelection in November 2020 for a second four-year term looks likely though Michael Bloomberg is emerging as a dark horse. If Trump does win, he will be in office till January 2025. His effective term in office will coincide with the end of Modi's second term, just before the May 2024 Lok Sabha election. The TrumpModi partnership may therefore be longer-lived than either expected.
Apart from Afghanistan, China is a country of interest to both leaders. Trump has played cat and mouse with President Xi Jinping. He continues to impose punitive tariffs on Chinese imports but has relaxed some in phase one of the trade deal finalised in December 2019, shortly before the COVID-19 crisis struck. American policymakers make no secret of the fact that they regard China as a threat to the West. At the recent Munich Security Conference, US Secretary of State Mike Pompeo minced no words: "I am happy to report that the death of the transatlantic alliance is grossly exaggerated.
The West is winning and we're winning together." Pompeo was referring to a rift between the US and Europe that the Russians and Chinese were hoping to see. Listening to Pompeo in the audience in Munich last week was China's powerful foreign minister Wang Yi. He wasted no time in condemning Pompeo's remarks, calling them "lies, not based on facts." The US-China battle for economic and technological supremacy will dominate geopolitics over the next decade. For India, it is a crucial decade. Alarmists are already calling the country's demographic dividend a "demographic disaster".
The numbers game
India is in fact in a geopolitical sweet spot. Both the US and China need India on its side. Despite an economic slowdown, India's nominal GDP (real GDP plus inflation) is set to grow at over 10 per cent a year, thus doubling to $6 trillion in 2027 and further doubling to $12 trillion in 2034 (before adjusting downwards for currency depreciation and adjusting upwards for higher future real average growth of more than 5 per cent). That would make India the world's third largest economy by a wide margin, cutting the GDP gap with China from 5:1 to 3:1. Policymakers in Washington and Beijing will spare little effort to keep India, the world's third largest economy and second largest consumer market, on its side. India has long punched below its geopolitical weight.
It must now not punch below its geoeconomic weight. Some of the Modi government's economic policies - protectionist import tariffs and over-regulation, for example - need to be reversed. The next decade will set India on the road to becoming a middle income country. Equally, if economic policies are not rationalised, it could turn out to be another lost decade. After the Trump and Modi show is over on Tuesday, it will be time for Indian policymakers to get down to work to put the economy back on track.(Courtesy of Mail Today)
(Courtesy of Mail Today)