India May Be First Globally To Sign A Bilateral Trade Agreement With The US Soon After Vance Visit

The visit of the new Vice President of America to India is a timely cameo in a very important context. JD Vance, currently in India for four days in a semi-official cum private visit to New Delhi and Jaipur/Agra, along with second lady Usha Vance and their three children, is not the usual near-invisible US Vice President.

In the first hundred days of the Trump administration 2.0, Vance has been called a ‘wingman’ by the media and has featured in most of the president’s flurry of initiatives. President Donald Trump has already been asked if he sees the young and robust Vance as a successor. He demurred, probably because it is so early in the day, but called him ‘very capable’.

Vance and his family were met at the New Delhi airport by Union Railway and Information & Broadcasting Minister Ashwini Vaishnaw. He also received a ceremonial guard of honour on arrival.

Vance is being treated with all seriousness, not just as a high dignitary, but a political heavyweight in current geopolitics. His recent visits to Western Europe and Greenland left their mark in terms of advancing Trump’s vision for America. His pronouncements and actions there had their salutary impacts.

India has clearly shown its keenness to progress an enhanced trade and strategic relationship with America during Vance’s visit on Monday to meet Prime Minister Modi. This, even as the prime minister jetted off to Saudi Arabia on another strategic bilateral visit on Tuesday.

It is a crucial and unprecedented time in global geopolitics, with America recasting the earlier World Trade Organisation (WTO) based trade rules and all existing trade agreements with itself and between other nations into a bilateral format. WTO rules were, lately, being ignored with impunity anyway, mainly by China. The UN too is in a sorry state with many of its agencies infiltrated by China and other pressure groups.

And now, in order to reverse China’s trade dominance built over more than 30 years, albeit with America aiding and abetting it all the way, the US, long an advocate for free trade, has decided to use tariffs. This, to right the balance in its favour amongst massive trade deficits against it.

When President Nixon’s America engineered the rise of the bilateral relationship with China, it was partially to undermine the USSR. But, now, as they say, times have changed. China became factory to the world with $500 billion of trade with the US alone, and at least $ 150 billion with Germany and France each amongst others in the EU.

Today, in the midst of the tariff wars unleashed by the Trump administration, China is threatening all and sundry that it will punish all those countries who cave in to unilateral US tariff lowering demands.

There are very high US tariffs on China, some as high as 245%, but the US has paused punishing reciprocal tariffs on some 27 countries for 90 days, soon after April 2^nd when they were announced. This, to give these countries a chance to recast their trade rules. These were the ones that did not announce retaliatory reciprocal tariffs against the US, and indeed some announced lowering of tariffs at the first salvo. Cambodia, for example lowered its tariffs against US goods from 45% to 5% at one fell swoop.

 While the EU has announced retaliatory tariffs against the US, India’s QUAD partner Japan is also fast forwarding its trade negotiations with the US, with a trade delegation just returned after several days of negotiations in America. However, Japan earns 20% of its profit from its business with America, and 15% from dealings with China, which presents a conundrum, and calls for a careful balancing act.

India has no such problems, because like America, it runs massive and ever- growing dollar trade surpluses in favour of China. Both President Trump and Prime Minister Modi are keen to take the Indo-US strategic and military partnership to new heights, incorporating and boosting bilateral trade to some $ 500 billion annually.  This, as America plans to isolate and reduce China’s global trade drastically.

On Monday21st April, Vance held talks with Prime Minister Modi both one-on-one and at delegation level at the prime minister’s residence at 7 Lok Kalyan Marg.

The forthcoming trade agreement was discussed as well as cooperation in defence, strategic technologies, energy including nuclear energy, the forthcoming QUAD Summit that India will host this year, and other areas including the contentious tariffs on highly sheltered agricultural produce.

The negotiations have been proceeding amicably and rapidly, with India amenable to lowering its tariffs in multiple instances. The prime minister hosted the Vance family to dinner thereafter.

The Modi administration, that hosted the last G20 or the G21 by its end, before Brazil took over. India not only engineered the unanimous inclusion of the multiple country African Union, but also navigated the previous Biden term adroitly. This despite bold attempts by the American deep state spearheaded by the Biden decorated George Soros, Khalistani and Islamic terrorists, and other far-left anti-India irritants.

Nevertheless, the Indo-US strategic relationship, steadily built over several successive US administrations with even-handed bipartisan support, through the Manmohan Singh and Modi led years, has stayed on track.

However, the return of President Donald Trump for a second term after a gap of four years is a stellar opportunity to take the Indo-US relationship to a whole new level.  

Prime Minister Modi was among the first heads of government invited on a state visit to the US in February, very soon after Trump was sworn in on 20^th January 2025. Observers noted that the Indian prime minister was received by the Trumps even before America’s long standing European allies.

During the swearing in ceremony, held indoors because of the exceptionally bitter January cold, India’s External Affairs Minister was seated very close to the podium as a special mark of favour in the packed hall at the Capitol. None of this was by coincidence. India has a strategic design with regard to America, while the US realises that India is very important in its plan to recast the world to better suit itself. The personal chemistry between Modi and Trump, already established in Modi 1.0, is also playing a part.

The still vigorous 78 year-old Trump, in the first year of his second term, is famously thinking about amending the US Constitution so that he can run for a third. If he succeeds, he will be the first to do so, after WWII President Franklin Delano Roosevelt. Roosevelt died in office during his fourth term. The US Constitution was amended thereafter to a two-term limit for presidents.

If India succeeds in signing a trade agreement within this 90 day window with the US it will be the fastest such in its republican history, and augurs well for a more comprehensive FTA to follow. As an opportunity to step into the trade void left by the strained US-China relationship, it is unique, and a chance that India cannot afford to miss.

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April 22^nd, 2025

For: Firstpost/News18.com

Gautam Mukherjee