Kashif Ali
THE US-India bilateral ties have suffered a major setback after imposition of 50 percent tariff on Indian exports to the US by President Donald Trump.
Initially, President Trump imposed 25 percent tariff on India while the additional 25pc, effective from August 27, was imposed on New Delhi as a penalty for buying crude oil from Russia. During the last fiscal year, India’s exports to the United States were valued at around $87 billion. Following the imposition of a 50% tariff by President Trump, New Delhi is projected to lose about 40–45% of this trade, amounting to nearly $37–40 billion in export value.
Indian media report that Modi declined four recent calls from President Trump, signaling strains in their personal relationship. Washington has long viewed New Delhi as a counterweight to China, forging close ties with India over the past 25 years despite its Cold War alignment with the (former) Soviet Union. For years, India projected its economic and military power as a counterbalance to China, but the myth of Indian military strength was shattered during the limited war with Pakistan in May. India’s dismal military performance-triggered by New Delhi’s unprovoked aggression on Pakistani soil resulted in the downing of several Indian fighter jets, including the much-hyped Rafael.
This poor showing appears to have raised doubts in Washington about India’s efficacy as a bulwark against China. After all, if New Delhi, with a defense budget nine times larger than Islamabad’s, failed to prevail against a neighbour equipped with relatively modest Chinese hardware, how could it realistically confront Beijing? China’s economy is 4.5 times larger, its defense spending is 2.7 times higher and its active military manpower is 1.4 times greater than India’s, coupled with both qualitative and quantitative superiority in military technology.
Whereas, bilateral ties between Islamabad and Washington are on an upward trajectory. During the May skirmish, Islamabad credited President Trump for brokering a ceasefire that helped avert a potential nuclear crisis. In contrast, New Delhi denied any US involvement, rejecting the attribution of credit that Trump sought in portraying himself as a peace broker. Pakistan’s acknowledgment of Trump’s mediation, coupled with India’s denial, arguably enhanced Islamabad’s diplomatic standing with the US President. At the same time, Trump’s ceasefire announcement between Pakistan and India proved a major political setback for Prime Minister Modi, creating strains in New Delhi–Washington relations.
In June, Army Chief Field Marshal Asim Munir’s five-day US visit marked a turning point in Pakistan–US ties. Trump hosted him for a rare one-on-one luncheon, while Munir highlighted Pakistan’s counterterrorism role, regional importance and untapped potential in IT, agriculture and mining-projecting Islamabad as both a strategic and economic partner. The success of Munir’s visit was evident on July 31, when Pakistan and the US signed a trade deal cutting tariffs on Pakistani goods to 19% – the lowest in South Asia – and opening cooperation in energy, minerals, IT and even cryptocurrency – along with a joint plan to develop Pakistan’s vast oil reserves.
Pakistan’s successful military diplomacy, coupled with its active counterterrorism cooperation against the Islamic State (IS) in the Af-Pak region, has drawn Washington closer to Islamabad. At the same time, the United States appears to be recalibrating its strategic posture in South Asia, signaling a willingness to look beyond its long-standing reliance on New Delhi as its principal partner. Furthermore, Islamabad’s close ties with both Beijing and Tehran enhance its diplomatic value in Washington’s eyes, positioning Pakistan as a potential bridge in the otherwise strained US-China and US-Iran relationships.
On the other hand, Islamabad appears willing to seize the opportunity created by the deteriorating ties between Washington and New Delhi by broadening its engagement with the US beyond counterterrorism to areas such as trade and investment. Pakistan’s exports to the US stood at $5.3 billion in the last fiscal year. With relatively lower tariffs on Pakistani goods and amid Trump’s trade war with New Delhi, Islamabad could potentially capture a significant portion of India’s market share in the US – particularly in the textile sector – thereby doubling its export revenues.
The current standoff between Washington and New Delhi may prove temporary, as policymakers in both capitals are likely to seek a restoration of the close ties. Nevertheless, Pakistan must seize this opportunity to cultivate a broader, long-term strategic partnership with Washington that extends beyond counterterrorism to include trade, investment and a dignified diplomatic relationship on an equal footing. At the same time, Pakistani decision-makers should remain mindful of Army Chief Field Marshal Syed Asim Munir’s reminder that Pakistan will not sacrifice one friend for another – a principle particularly relevant to its simultaneous relationships with China and the United States.
—The writer is journalist specializing in foreign affairs.([email protected].)
