P Chidambaram writes: US audacity, not reciprocity

Chidambaram Slams US Trade Posture as Overreach

In a pointed opinion piece, veteran Congress leader and former Finance Minister P Chidambaram has taken aim at the United States' recent trade policies towards India, labeling them not as acts of reciprocity but outright audacity. Chidambaram argues that Washington's threats of steep tariffs on Indian goods stem from a sense of entitlement rather than fair play. He points to the US imposing duties on everything from steel to digital services while turning a blind eye to its own massive subsidies in agriculture and technology sectors. This imbalance, he contends, reveals a deeper hypocrisy in America's approach to global trade rules. Indian exporters, already grappling with supply chain disruptions and rising costs, now face the prospect of retaliatory measures that could hit billions in shipments. Chidambaram's words come at a time when bilateral trade talks have stalled, with both sides digging in their heels.

Chidambaram draws on his decades of experience in economic policymaking to highlight how the US has long benefited from an open Indian market while protecting its domestic industries fiercely. He recalls past negotiations where India made concessions on intellectual property only to receive vague promises in return. The current spat, triggered by US complaints over India's data localization rules and higher tariffs on Harley-Davidson motorcycles, exemplifies this pattern. "The US preaches free trade when it suits them, but slaps barriers the moment their corporations feel a pinch," Chidambaram writes, emphasizing that India's measures are defensive responses to unfair practices. This perspective resonates with many in India's business community, who see the rhetoric from Washington as bullying rather than negotiation.

Roots of the Trade Friction

The tensions trace back to longstanding disputes under the World Trade Organization framework, where India has pushed for reforms to protect developing economies. Chidambaram notes that the US withdrawal from key WTO appellate functions has crippled the dispute resolution mechanism, leaving smaller nations vulnerable. He criticizes the Biden administration's strategy of using Section 301 investigations to target India's pharmaceutical sector, which supplies affordable generics worldwide. This move, he says, disregards the lives saved by low-cost medicines exported from India. Furthermore, amid global supply chain shifts post-pandemic, the US push for "friendshoring" aims to reroute trade away from India towards allies, squeezing New Delhi's manufacturing ambitions. Chidambaram warns that yielding to such pressure would undermine India's Atmanirbhar Bharat initiative, which seeks self-reliance in critical sectors like electronics and defense. Economists echo this, pointing out that reciprocal tariffs from India could hurt US farmers dependent on Indian markets for spices and textiles.

Delving deeper, Chidambaram highlights the asymmetry in market access. While American tech giants like Google and Amazon dominate India's digital economy, US regulators block Indian apps and services on national security pretexts. He argues this double standard erodes trust and calls for a principled stand from Indian negotiators. Recent data shows India's trade deficit with the US widening, yet American demands focus solely on opening Indian markets further without addressing dumping of cheap goods. This dynamic, Chidambaram asserts, demands a recalibration of India's strategy, prioritizing strategic autonomy over blind adherence to bilateral pacts.

Implications for India's Economic Strategy

"What the US calls reciprocity is nothing but audacity – demanding one-sided concessions while shielding their trillion-dollar subsidies and closing doors to our competitive exports. India must respond with resolve, not retreat, to protect our growth story," Chidambaram stated firmly.

Looking ahead, Chidambaram advocates for diversified trade partnerships, strengthening ties with the EU, ASEAN, and BRICS nations to offset US pressures. He urges the government to fast-track free trade agreements and invest in domestic R&D to boost competitiveness. Critics within the ruling establishment counter that engaging the US remains vital for technology transfers and investments, but Chidambaram dismisses this as short-sighted, insisting on mutual respect as the bedrock of any deal. As tariffs loom, Indian industries from auto to IT are bracing for impact, with calls growing for a unified national response. This episode underscores the challenges of navigating a multipolar world where economic power plays out in boardrooms and ballot boxes alike. Policymakers in Delhi are reportedly reviewing options, balancing retaliation with diplomacy to safeguard jobs and exports.

In wrapping up, Chidambaram's critique spotlights the need for India to assert its position assertively against perceived US overreach. By framing the issue as audacity over reciprocity, he rallies support for a tougher negotiating stance that prioritizes national interests. The ongoing saga will test India's resolve in upholding fair trade principles amid superpower rivalries.