By Dr. Ajay Kothari
About 25 years ago, I wanted to take my seven-year-old used car to India as a gift for my parents. After some inquiry, I learned that the tariff (or customs duty) would be about 100%—which I would also have to pay. Needless to say, it was a no-go.
Perhaps one can understand that policy in the economic climate of 25 years ago, when India needed to be more protective of its domestic industries. But things are different now, and we need to adapt to present circumstances. India is now the fastest-growing major economy in the world, expanding at 6.5%.
I have to agree with President Trump—it isn’t fair for trade to be a one-way affair. All he is trying to do is level the playing field somewhat.
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The European Union, with a much larger economy than India, reached a compromise tariff rate of 15%. So did Japan and South Korea. Why can’t India, under Piyush Goyal, do the same? India could—and should—have been one of the first countries to sign a trade deal. But Goyal stretched the rubber band too far. Apparently, that deal was on the table but was rejected by Goyal and his team. It was a huge mistake.
Piyush Goyal needs to go—at least from heading this trade deal. It would be ideal if Prime Minister Modi himself took control of this unnecessary convolution and rectified it as only he can—with direct contact with President Trump.
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President Trump and Prime Minister Modi have built a warm, close relationship over the past 8–9 years. One only needs to recall them walking hand-in-hand at the Houston rally (“Howdy Modi”) or the very warm welcome President Trump received in Ahmedabad in 2020. Their countries also came closer through partnerships in defense, space, and other fields. Why risk all that over a few percentage points in a trade deal? It is asinine, short-sighted, and entirely avoidable.
The Russian oil tariff is largely an outgrowth of dissatisfaction over the lack of an early trade deal. It likely would not have been imposed so openly had the deal been finalized months earlier. Nor would we be witnessing this recent and apparent closeness with Pakistan.
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India is a great country and is now run very well under PM Modi—a great leader and a great friend, as President Trump said yesterday. The U.S. is also strong, especially under President Trump. Here is a chance to restore and even grow that relationship. Don’t throw it away willy-nilly. It is late, but not too late. If the U.S. signs a deal with China before India, it will not be forgotten and will always remain a blemish.
And to Shashi Tharoor: we are part of the Indian American diaspora, yes, but we are Americans first. We should not—and cannot—carry water for you. Make it happen from India. That is the right way and the only way. It is partly your responsibility. To skirt that and place it on our shoulders is imprudent.
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This is not just about protecting our children, nieces, and nephews, or the future generations of the Indian American diaspora. It is about fairness—in this case, in trade.
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